Summary of Semiconductor Production Equipment Conference Call Industry Overview - **Industry**: Semiconductor Production Equipment (SPE) - **Region**: Japan - **Industry View**: Attractive [1] Key Insights - **Market Forecast**: The SEAJ updated its forecast for Japan's semiconductor and flat panel display (FPD) manufacturing equipment market, predicting a growth of 2% for F3/26 and 10% for F3/27 [13] - **Sales Projections**: - Total SPE sales for the year ending March 2026 are estimated at ¥5,124.9 billion, reflecting a year-on-year growth of 10% [15] - Wafer Process Equipment sales are projected at ¥3,648.9 billion for the same period, also showing a 10% increase [15] - **WFE Revenue Trends**: - WFE revenue is expected to reach ¥109,058 million in 2025, with a year-on-year growth of 6% [12] - Total semiconductor revenue is forecasted to be ¥710,095 million in 2025, with a 13% increase from the previous year [12] Company-Specific Insights - **Tokyo Electron**: - Price target raised due to improved sentiment in the front-end SPE market [14] - **DISCO**: - Non-consolidated sales increased by 10.1% year-on-year to ¥75.4 billion for Apr-Jun 2025, exceeding guidance [24] - Demand for SiC device applications is accelerating, with strong shipments reported for Taiwan OSAT and China [25] - **Advantest**: - Anticipated strong demand for AI GPU testers and a significant increase in F3/26 guidance due to robust sales [30] - **Screen Holdings**: - Recommended as an Overweight (OW) due to high operating rates and attractive share price [28] Market Dynamics - **AI Demand**: The computation required for AI is increasing exponentially, driving demand for semiconductor production equipment [6] - **China's Capex Resumption**: Chinese manufacturers are resuming capital expenditures towards the second half of 2025, although risks remain due to US restrictions [27] - **Back-End Equipment Demand**: There is a booming demand for back-end equipment, particularly for generative AI HBM devices [27] Risks and Considerations - **Downside Risks**: - Sluggish global demand for electronics and prolonged corrections in the semiconductor market due to high inflation and US-China trade tensions [56][66] - **Upside Risks**: - Stronger-than-expected recovery in smartphone demand and semiconductor investments could drive growth [60][65] Conclusion The semiconductor production equipment industry in Japan is poised for growth, driven by advancements in technology and increasing demand for AI-related applications. Companies like Tokyo Electron, DISCO, and Advantest are well-positioned to benefit from these trends, although potential risks from geopolitical tensions and market corrections remain.

June 19, 2025 02:51 AM GMT Semiconductor Production Equipment | Japan Stronger Restrictions on Chip Exports to China and Our SPE Picks Taiwan's Bureau of Foreign Trade, Ministry of Economic Affairs updated the entity list on its website on Jun 14, adding Huawei and SMIC. With possibility of other US allies making similar moves, we focus on Disco and Advantest as they make back-end SPE exposed to relatively little regulatory risk. Key Takeaways Taiwan adds Huawei, SMIC to export control list: Taiwan's Bureau ...