Taiwan semiconductor equipment imports grew 40% YoY, with capex continuing to support Japanese and European equipment makers

Overview

The report uses July 2026 import data released by Taiwan's Ministry of Finance to track monthly changes in Taiwan's semiconductor equipment, testers, lithography equipment, Japanese wafer fabrication equipment, and cleaning equipment imports, and maps them through historical correlations and regression models to the Taiwan sales performance of Advantest, ASML, Tokyo Electron, and Screen. Overall equipment imports remained strong YoY, reflecting continued Taiwan foundry capex, but monthly data declined MoM and performance diverged across equipment categories.

Core views

Taiwan semiconductor equipment imports increased 40% YoY, imports from Japan rose 54% YoY, and the three-month moving averages for both grew 1% MoM, continuing to support a positive view on the Japanese and European semiconductor equipment industry. ASML benefits from stronger Taiwan lithography demand driven by TSMC capacity expansion, but its third-quarter Taiwan system sales are expected to decline 14% QoQ. Import signals for test equipment, comprehensive wafer fabrication equipment, and cleaning equipment indicate that quarterly Taiwan revenue growth for Advantest, Tokyo Electron, and Screen may be below market consensus expectations.

Analysis framework

The report first extracts Taiwan monthly import values and YoY/MoM changes by equipment category, then uses three-month moving averages to reduce the impact of monthly volatility. It then tests historical correlations between import data and each company's Taiwan revenue and estimates regressions, comparing model forecasts with market consensus expectations. Target prices are based on EPS forecasts for future Q5 to Q8 and P/E multiple valuation.

Methodology notes

• High-frequency industry trackingTaiwan semiconductor equipment import tracker

  Using equipment import data as a high-frequency proxy for semiconductor capex and supplier revenue

  Monthly import values, YoY changes, and MoM changes are observed by categories including semiconductor equipment, testers, lithography equipment, Japanese wafer fabrication equipment, and cleaning equipment. Import data has batch and seasonal characteristics, so single-month results need to be interpreted together with three-month moving averages.

• Quantitative forecastingHistorical correlation and univariate regression

  Estimating quarterly revenue based on the historical relationship between import data and company Taiwan sales

  The correlation between ASML's single-month Taiwan lithography equipment imports and its Taiwan system sales is moderate, with an R² of 53%; import proxy indicators for other companies also have only directional correlation, so model forecasts contain errors arising from scope gaps and monthly volatility.

• Trend smoothingThree-month moving average

  Reducing monthly volatility in equipment imports through rolling averages

  The three-month moving average for overall imports and imports from Japan increased 1% MoM, testers declined 4%, and Tokyo Electron-related equipment and cleaning equipment both increased 5%.

• Relative valuationForward P/E valuation

  Applying target P/E multiples to EPS forecasts for future Q5 to Q8

  ASML and Advantest use a 40x P/E multiple, Tokyo Electron uses 28x, and Screen uses 19x; the target price for ASML's U.S.-listed shares is additionally converted based on the EUR/USD exchange rate.

Asset mapping & comparison

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

• ASML HOLDING NV (ASML)

  Taiwan lithography equipment imports are a high-frequency proxy for ASML's Taiwan system sales.

  Strengths

  Taiwan lithography equipment imports increased 86% YoY in July, with TSMC expansion driving stronger lithography demand momentum; the company maintains an Outperform rating.

  Weaknesses

  July imports declined 54% MoM, and the model forecasts third-quarter Taiwan system sales to decline 14% QoQ, with Taiwan revenue as a share of system sales expected to fall to 19%.

  Comparison

  Compared with testers, comprehensive wafer fabrication equipment, and cleaning equipment, lithography equipment had stronger YoY growth, but the R² between single-month imports and revenue is only 53%.

  Risks

  EUV commercialization costs leading to margins below expectations, excessive stockpiling in China, weakness in the wafer fabrication equipment market, slower technology migration, threats from alternative technologies, and further tightening of export controls on Chinese customers.

• Advantest Corp (6857.JP)

  Taiwan tester imports have a relatively high directional correlation with Advantest's SoC testers and Taiwan sales revenue.

  Strengths

  AI-related GPU and HBM demand supports long-term test equipment demand; the company is rated Outperform with a target price of ¥45,800.

  Weaknesses

  July tester imports declined 21% MoM and 14% YoY, and the model forecasts quarterly Taiwan sales to decline 6% QoQ.

  Comparison

  The model result is weaker than the 11% QoQ growth in total quarterly revenue implied by market consensus expectations, indicating downside risk to near-term expectations.

  Risks

  Changes in AI end-demand such as GPU and HBM, changes in the competitive environment, and exchange rate fluctuations may affect earnings and valuation multiples.

• Tokyo Electron Ltd (8035.JP)

  Taiwan imports from Japan of equipment such as CVD, dry etching, cleaning, coater/developer, and rapid thermal processing have directional correlation with the company's Taiwan revenue.

  Strengths

  Related equipment increased 80% YoY in July, and the three-month moving average rose 5% MoM; the company is rated Outperform with a target price of ¥79,300.

  Weaknesses

  Related categories declined 30% MoM in the single month, and the model forecasts quarterly Taiwan sales to decline 13% QoQ.

  Comparison

  The quarterly Taiwan sales forecast is significantly weaker than the 18% QoQ growth in total sales implied by market consensus expectations.

  Risks

  Changes in U.S. trade restrictions, slowing global logic and memory semiconductor demand, declining capex, and unfavorable exchange rate movements.

• Screen Holdings Co Ltd (7735.JP)

  Taiwan cleaning equipment imports are a directional proxy for Screen's Taiwan revenue.

  Strengths

  Cleaning equipment imports increased 51% YoY in July, and the three-month moving average rose 5% MoM; increased penetration of direct patterning and wet etching may provide upside.

  Weaknesses

  July imports declined 32% MoM, and the model forecasts quarterly Taiwan sales to be flat QoQ; correlation is weaker because import data lacks country-level breakdowns.

  Comparison

  The model forecast is below the 60% QoQ growth in quarterly semiconductor equipment sales implied by market consensus expectations, and the company is rated only Market-Perform.

  Risks

  China investment peaking, accelerating domestic substitution in China, changes in the competitive environment, and unfavorable exchange rate movements.

Key data

• Taiwan semiconductor equipment importsUS$5.0bnIn July 2026, up 40% YoY, down 22% MoM, and the three-month moving average increased 1% MoM.
• Taiwan semiconductor equipment imports from JapanUS$884mnIn July 2026, up 54% YoY, down 24% MoM, and the three-month moving average increased 1% MoM.
• Taiwan tester importsUS$507mnJuly imports from Japan and Malaysia combined fell 21% MoM and 14% YoY, and the three-month average declined 4% MoM.
• Taiwan lithography equipment imports€554mnIn July 2026, up 86% YoY and down 54% MoM; the first month of a quarter is usually seasonally weaker.
• ASML third-quarter Taiwan system sales forecast€1.69bnExpected to increase 1% YoY and decline 14% QoQ, accounting for 19% of ASML's estimated third-quarter system sales of €8.80bn.
• Advantest quarterly Taiwan sales forecastDown 6% QoQWeaker than the 11% QoQ growth in total quarterly revenue implied by market consensus expectations.
• Tokyo Electron quarterly Taiwan sales forecastDown 13% QoQWeaker than the 18% QoQ growth in total quarterly sales implied by market consensus expectations.
• Screen quarterly Taiwan sales forecastFlat QoQWeaker than the 60% QoQ growth in quarterly semiconductor equipment sales implied by market consensus expectations.

Impact & implications

High YoY growth in imports indicates that Taiwan's advanced process and wafer capacity expansion is still supporting equipment demand, which is positive for the medium-term fundamentals of Japanese and European equipment supply chains. ASML's lithography equipment demand signal is the most positive, but its Taiwan sales contribution is expected to fall from 30% last quarter to 19%. Other equipment categories saw clear MoM declines in July, suggesting that high bases, delivery timing, and monthly volatility may cause near-term revenue for related companies to fall short of market expectations. Investors should distinguish between the long-term upward trend in capex and short-term quarterly recognition timing.

Risks

• Equipment import data has clear batch and seasonal characteristics, and single-month MoM changes may not accurately represent quarterly revenue trends.
• Some equipment categories lack data on import source countries, leading to scope errors in company revenue mapping and regression forecasts.
• If Taiwan foundry capex or advanced process capacity expansion falls short of expectations, semiconductor equipment demand will weaken.
• Further tightening of semiconductor equipment export restrictions to China by the U.S. and other regions may affect orders and revenue for global equipment makers.
• Accelerating domestic substitution of equipment in China and intensifying industry competition may depress market share and profitability.
• Exchange rate fluctuations may affect revenue translation, profits, and target prices for Japanese and European equipment companies.

What to watch

• Whether Taiwan semiconductor equipment imports from August to September 2026 can recover from the MoM decline in July.
• The realization of Taiwan lithography equipment imports and ASML's third-quarter Taiwan system sales forecast of €1.69bn.
• TSMC's advanced process and capacity expansion progress and its capex guidance.
• Whether Advantest, Tokyo Electron, and Screen quarterly revenue shows downside deviations relative to market consensus expectations.
• Whether the three-month moving average can maintain positive growth and confirm the sustainability of equipment demand.
• Semiconductor equipment export controls targeting Chinese customers and progress in China's domestic substitution.