Japanese Semiconductor Equipment Monthly Investment Report: Pay attention to companies such as Ebara, memory price trends are the core variable (Morgan Stanley)

Street Signal | Japanese Semiconductor Equipment Monthly Investment Report: Pay attention to companies such as Ebara, memory price trends are the core variable (Morgan Stanley)

Morgan Stanley released its July Japan Semiconductor Production Equipment (SPE) monthly report. The report provides order and sales forecasts for companies such as Ebara and provides in-depth analysis of price trends in the DRAM market.

Data show that China's semiconductor equipment import data (-7% year-on-year in June) and Japan's equipment exports to China (-15% year-on-year in June) both declined. The core logic of the report is that the trend of memory prices is a key variable that determines the future equipment investment cycle.

Currently, DRAM shipments and ASP growth are slowing down, which may have a negative impact on equipment manufacturers' orders. One sentence conclusion: The short-term prosperity of Japan's semiconductor equipment industry is subject to the downward pressure of the memory price cycle.

In particular, the slowdown in exports to the Chinese market deserves vigilance. However, AI-driven structural demand is still a long-term focus. Good/bad: Good for equipment manufacturers such as Ebara, but they need to pay attention to their order risks from the Chinese market.

It is negative for the Japanese SPE sector as a whole, especially for companies with greater exposure to the Chinese market. The slowdown in memory prices may not yet be fully priced in by the market. Catalysts:

1) Capital expenditure plans of major memory manufacturers (Samsung, SK Hynix, Micron);

2) Price trends of DRAM and NAND Flash;

3) China’s semiconductor equipment import data and localized procurement progress.