J.P. Morgan reviews Japanese semiconductor equipment and technical materials valuation, capex, and supply-chain opportunities

Overview

This is a J.P. Morgan industry research and valuation package on the semiconductor and technical materials segments within technology. Centered on the Japanese listed coverage universe, the report compares equipment, materials, glass, testing, wafer processing, and industrial materials companies against global semiconductor demand, SPE equipment sales, memory supply-demand, AI servers, and CoWoS capacity expansion.

Core views

The underlying thesis is that the semiconductor cycle and AI-related capital spending continue to drive earnings elasticity for Japanese equipment and materials companies. Within the equipment chain, Tokyo Electron, Advantest, and SCREEN Holdings benefit from SPE demand, testing demand, and advanced-node investment; within the materials chain, JX Advanced Metals, Nittobo, HOYA, and Rigaku Holdings benefit from demand for high-end materials, inspection, and critical consumables. At the same time, several stocks remain Neutral or Underweight because of valuation, order volatility, or limited earnings leverage.

Analysis framework

The report combines a top-down industry view with horizontal company comparison: it first tracks industry variables such as semiconductor shipments, CSP capex, AI servers, CoWoS, DRAM, NAND, and SPE orders, then compares the covered companies on valuation, revenue growth, EPS growth, PER, EV/EBITDA, PBR, ROE, dividend yield, FCF yield, and operating margin.

Methodology notes

• Valuation comparisonPeer valuation table

  Compares covered companies on share price, target price, market cap, sales and EPS CAGR, PER, EV/EBITDA, PBR, ROE, FCF yield, and operating margin.

  This framework is suitable for assessing whether the growth profile, earnings quality, and valuation of different semiconductor equipment and materials companies are aligned.

• Industry cycle analysisSemiconductor supply-demand and capex tracking

  Tracks CSP capex, AI server shipments, CoWoS capacity, DRAM/NAND supply-demand, ASML sales, and SPE orders.

  These variables determine equipment orders, materials demand, and the timing of earnings realization for related companies.

• Supply-chain mappingSemiconductor supply chain and technology roadmap

  Places foundries, memory, equipment, materials, glass, and testing companies within the semiconductor supply chain for comparison.

  This helps identify which companies are closer to AI, advanced packaging, advanced nodes, and high-end materials demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Tokyo Electron (8035)

  Semiconductor equipment leader, affected by SPE new equipment sales, advanced-node investment, and foundry capex.

  Strengths

  Coverage rating is OW, and the business is highly correlated with SPE demand, major customer capex, and semiconductor technology-node upgrades.

  Weaknesses

  Valuation is relatively high, making it sensitive to order realization and cycle durability.

  Comparison

  Along with Advantest and SCREEN Holdings, it is one of Japan's core semiconductor equipment names, but it sits in a different part of the value chain.

  Risks

  A downward revision in foundry capex, a slowdown in advanced-node investment, or weaker order visibility.

• Advantest (6857)

  A test equipment company affected by demand for AI chips, memory, and non-memory testing.

  Strengths

  Rated OW, with the report separately highlighting order and sales trends, tester market share, and business expansion.

  Weaknesses

  Earnings are sensitive to semiconductor testing demand and the shipment pace of high-end chips.

  Comparison

  Compared with materials companies, Advantest has more direct exposure to semiconductor equipment and testing capex.

  Risks

  AI chip shipments falling short of expectations, delayed customer investment pace, or margin/share pressure from competition.

• KIOXIA Holdings (285A)

  A NAND memory company affected by NAND supply-demand, bit shipments, ASPs, and wafer output.

  Strengths

  Rated OW, with the valuation table showing upside to target price and the report tracking NAND market share and pricing trends.

  Weaknesses

  Memory pricing is highly cyclical, leading to large earnings volatility.

  Comparison

  Compared with equipment and materials names, KIOXIA has greater direct exposure to the memory price cycle.

  Risks

  A decline in NAND prices, overly rapid supply expansion, or weaker-than-expected end demand.

• JX Advanced Metals (5016)

  A semiconductor technical materials supplier, with the report focusing on sputtering targets and Cu target market share.

  Strengths

  Rated OW, with demand for high-end materials linked to advanced nodes and semiconductor supply-chain upgrades.

  Weaknesses

  Material pricing, capacity expansion, and customer qualification cycles may affect earnings realization.

  Comparison

  It shares the technical materials exposure with Nittobo, HOYA, and AGC, but its product and customer mix differ.

  Risks

  Slower customer expansion, material price volatility, and intensifying share competition.

• AGC (5201)

  A glass and strategic-business company with exposure to EUV mask blanks and flat-glass cost structure, among others.

  Strengths

  Diversified exposure across semiconductor materials and traditional glass businesses.

  Weaknesses

  Rated N, with some legacy businesses affected by energy, raw material, and price cycles.

  Comparison

  Compared with pure semiconductor equipment names, AGC's semiconductor leverage may be diluted by its traditional materials businesses.

  Risks

  Energy prices, natural gas, coal, glass prices, and demand volatility.

Key data

• Report date2026-06-22The file name and disclosure page indicate that this report is a June 2026 publication, with stock prices mostly based on the June 19, 2026 close.
• Number of covered companies18The disclosure page lists AGC, Advantest, Disco, HOYA, JX Advanced Metals, KIOXIA Holdings, Kaneka, Lasertec, Nikon, Nippon Electric Glass, Nippon Sheet Glass, Nittobo, Rigaku Holdings, SCREEN Holdings, Sumitomo Osaka Cement, Taiheiyo Cement, Tokyo Electron, and ULVAC.
• Tokyo Electron8035.T / ¥75,360 / OW / target price ¥85,000The valuation table shows it as an important Overweight name among Japanese semiconductor-related companies.
• Advantest6857.T / ¥31,740 / OW / target price ¥41,000The report separately presents charts on order and sales trends, tester market share, and business expansion.
• KIOXIA Holdings285A.T / ¥108,600 / OW / target price ¥155,000The report includes charts on NAND market share, bit shipments, and ASP trends.
• JX Advanced Metals5016.T / ¥4,747 / OW / target price ¥5,700A key company in the technical materials segment, with focus on semiconductor sputtering targets and the Cu target market share.
• Nittobo3110.T / ¥19,500 / OW / target price ¥29,000The report tracks NE/NER glass, T glass capacity, sales, and ASP trends.
• Key industry variablesCoWoS, AI servers, DRAM, NAND, SPE, CSP capexThese sections form the main basis for industry assumptions and company earnings sensitivity.

Impact & implications

For investors, the report suggests that Japanese semiconductor equipment and materials companies remain important exposed assets to AI servers, advanced packaging, memory recovery, and foundry capex. However, because valuations, order cycles, and end-demand exposure differ materially across stocks, portfolio allocation should distinguish between equipment leaders, test equipment, high-end materials, glass materials, and cyclical industrial materials in terms of risk-reward profile.

Risks

• AI server shipments or CSP capex coming in below expectations, weakening demand related to CoWoS, test equipment, and advanced-node investment.
• Less-than-expected improvement in DRAM and NAND supply-demand, causing memory prices and equipment investment to soften.
• Semiconductor equipment orders and SPE sales are cyclical, and a decline in backlog could compress valuations.
• Some Japanese semiconductor equipment and materials companies trade at elevated valuations, making them sensitive to earnings realization and target-price assumptions.
• Energy, raw material, FX, and industrial materials price swings may affect the margins of glass, cement, and materials companies.
• J.P. Morgan discloses market-making, client, investment-banking, or holdings relationships with several covered companies, so investors should read the conflict disclosures alongside the report.

What to watch

• The pace of CoWoS capacity expansion at TSMC and non-TSMC suppliers.
• The direction of revisions to J.P. Morgan's AI server shipment forecasts.
• Whether the CSP capex outlook continues to be revised upward.
• Global DRAM supply-demand, DDR5 penetration, and process migration.
• NAND bit shipments, ASPs, wafer output, and lithography structure changes.
• Order and sales trends at Advantest, Disco, Tokyo Electron, SCREEN HD, ULVAC, and Tokyo Seimitsu.
• Order changes at ASML and Lasertec.
• Capacity and pricing trends for key materials such as EUV mask blanks, semiconductor support glass, and sputtering targets.