KLA Walking a Fine Line Without Actinic Mask Inspection
KLA's dominance in non-actinic inspection tools positions it for strong short-term growth, but long-term risks loom as the industry shifts.
Lasertec leads the future with its actinic EUV inspection technology, expected to become essential as advanced nodes like 5nm and 3nm dominate.
Mask revenues are growing faster than mask units, driven by increasing complexity in photomasks for EUV lithography.
By 2027, over 80% of high-volume manufacturing masks are expected to undergo actinic inspection, a significant shift from today.
Investors should weigh near-term stability for KLA against the long-term growth potential of Lasertec in the mask inspection market.
During Photronics’ recent Q3 2024 earnings call, CEO Frank Lee remarked:
"In addition to new designs, photomask demand is driven by an increase in wafer manufacturing capacity. New fabs are being built globally to meet the growth in applications such as data centers that are needed to support AI and to support an increase in supply chain regionalization. This is a positive long-term trend for photomask demand."
This statement encapsulates the significant shifts in the semiconductor industry that are reshaping the mask inspection market—a sector critical to enabling advanced node production and ensuring yield efficiency.
Photomask Units and Semiconductor Units: A Discrepancy in Growth
To understand the dynamics of the mask inspection market, it’s important to look at the data for mask units and semiconductor units over recent years. Despite a steady rise in semiconductor unit growth, the number of masks has not always correlated with revenue growth. Chart 1 shows the direct relationship between Mask Units and Semiconductor Units according to The Information Network’s report entitled “Mask Making, Inspection, and Repair: Market Analysis and Strategic Issues.”
Chart 1