ACM Research Likely To Gain From China's Mature Node Investment, DRAM Spend, Analyst Says

Needham analyst Quinn Bolton maintained ACM Research Inc ACMR with a Buy and raised the price target from $10 to $12.
Bolton appreciates ACMR's reaffirming of its full-year 2022 revenue guidance of $365MM-$385MM, an encouraging sign that no unexpected issues arose in F4Q22 from U.S. export restrictions.
More importantly, the company also provided an initial 2023 sales outlook of $515MM-$585MM, significantly higher than the analyst's prior $400MM estimate.
The analyst believes ACMR's strength in 2023 came from continued mature node investment in China, DRAM spending at or above a 19nm half pitch, new product ramps, and new customer wins.
ACMR expects a temporary spending pause as domestic Chinese customers, and U.S. parts suppliers assess plans in response to the U.S. trade restrictions.
The company's outlook implies continued strength in mature node investments in China next year as customers add capacity to meet local semiconductor market consumption.
The analyst believes ACMR is leveraging its local equipment status in China to gain a share with domestic manufacturers.
The analyst also believes the company is gaining share with new products (semi-critical clean, ECP, and Furnace in 2023; track and PECVD in 2024) and new customers inside and outside China.
Price Action: ACMR shares traded higher by 5.53% at $12.60 on the last check Tuesday.

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