Tokyo Electron Ltd, Japan’s leading maker of semiconductor manufacturing tools, on Thursday forecast its profit to dip by more than a third from a record high as its customers slowed investment in new plant.

The company expects operating profit to fall 36% to 393 billion yen ($2.91 billion) in the twelve months to March 31, lower than an average estimate of 444 billion yen from 21 analysts surveyed by Refinitiv.

Big chipmakers such as Taiwan’s TSMC (2330.TW) have cut investment levels this year because they expects softer demand due to a slowing global economy.

Tokyo Electron CEO Toshiki Kawai said the Japanese government restrictions on advanced equipment may also impact its performance but that the company was still assessing the scope of the new rules.

“We will look at it closely to see whether or not it has an affect,” he said at a press briefing. China is an important market for the company including growing demand there for less advanced equipment that would not be subject to restrictions, he added.

Japan in March announced export restrictions from July on of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a U.S. policy to limit China’s ability to make advanced sub-14 nanometre chips.

A nanometre, or one-billionth of a metre, refers to a semiconductor industry technology, with fewer nanometres generally meaning more advanced chips.

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