Counterpoint: Revenue of the world's top five chip manufacturers will drop 1% year-on-year in 2023

The top five global wafer processing equipment (WFE) manufacturers’ revenues fell 1% year-over-year to $93.5 billion in 2023, driven by weak memory spending, a slowing macroeconomy, inventory adjustments, and subdued demand in smartphone and PC end markets. Among the five WFE suppliers, ASML and Applied Materials achieved year-over-year growth in 2023, while Lam Research, Tokyo Electron, and KLA saw revenue declines of 25%, 22%, and 8% year-over-year, respectively. Strong DUV and EUV sales pushed ASML to the top of the list in 2023.

Inventory adjustments and downward memory trends have a significant impact on overall revenue in the first half of 2023. Inventory normalization and rising DRAM demand in the second half of 2023 help limit the overall full-year revenue decline.

The foundry segment revenue grew 16% year-over-year in 2023, driven by the increase in gate-all-around transistor architectures and customer investments in mature node devices across sectors including IoT, AI, cloud, automotive and 5G.

Memory segment revenue fell 25% year over year due to weak overall memory WFE spending, especially NAND. Strength in DRAM in the second half of 2023 curbed the decline.

China's strong push for self-sufficiency, increased cutting-edge DRAM shipments, DRAM demand and mature node growth investments drove 31% year-over-year growth in shipments to China, accounting for about one-third of total system sales in 2023.

The growth of the wireless RF market in 2024 will be driven by all-gate technology enhancements; growth in AI, automotive, and IoT spending; new fabs coming online; DRAM technology node transition to support HBM; and increased NAND spending.