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Tokyo Electron is a major vendor of semiconductor fabrication tools. It operates primarily in the etch, deposition, and clean segments, which involve adding and removing materials to and from semiconductor wafers. Customers include leading-edge logic, foundry, and memory chipmakers such as Intel, TSMC, Micron, and Samsung.

Outlook: 
We expect the ongoing chip shortage to improve over the course of 2023 as supply and demand slowly work back into balance. With new capacity coming online in 2023, unit prices are expected to come under pressure. Yet, given the US embargo on China, TEL is expected to take advantage of important volume business generated by Chinese chipmakers. 

There is a bias toward a positive outlook as the company benefits from secular trends such as AI, cloud computing, 5G, and IoT as well as the ongoing chip supply shortages.