JPMorgan maps out the semiconductor technical materials and equipment supply chain, with AI servers, CoWoS, and advanced packaging as the core themes

Overview

This is a JPMorgan industry research report on semiconductors and technical materials within the technology sector, titled “Technology – Semiconductor/Technical Materials.” The report centers on Japanese semiconductor equipment, materials, and related industrial companies, while also extending to the global logic, memory, foundry, packaging and testing, and front-end/back-end equipment supply chain. It covers valuation, earnings performance, related company valuations, quarterly earnings trends, semiconductor and SPE shipment YoY, CSP capital expenditures, end-market assumptions, CoWoS and AI servers, ASML lithography system sales, DRAM, NAND Flash, inventories, sales trends, and supply chain roadmaps.

Core views

The core view of the report is that structural opportunities in the semiconductor supply chain are concentrated in AI servers, CoWoS capacity expansion, advanced packaging, DDR5 and recovering memory demand, recovering SPE orders and sales, and technological upgrades in key equipment and materials. Japanese companies hold strong industry positions across multiple niches including cutting, grinding, testing, cleaning, coating/developing, thermal processing, materials, glass, photomasks, and packaging materials. The report also shows that the industry is not rising uniformly, with clear differentiation in individual stock ratings: some beneficiaries of technology upgrades are rated Overweight, while some glass, equipment, or inspection-related companies remain Neutral.

Analysis framework

The report uses a combination of top-down and bottom-up analysis: it first examines industry drivers such as CSP capital expenditures, AI server shipments, CoWoS capacity, ASML sales, and DRAM and NAND supply and demand, then breaks down SPE equipment sales, order backlog, application and regional distribution, and finally maps these to Japanese listed companies and global supply chain segments. The company-specific section uses key charts to show sales trends, regional structure, market share, capacity, ASP, cost, and performance by business segment.

Methodology notes

• Valuation comparisonValuation and peer comparison

  Comparison of valuations and ratings of related companies

  The report includes sections titled “Valuation” and “Valuations for related firms” to compare the valuations and investment ratings of semiconductor equipment, materials, and related industrial companies.

• Industry cycle trackingCapex, shipment and order trend analysis

  Capital expenditure, shipment, order, and sales trends

  The report tracks semiconductor company capital expenditures, YoY SPE shipment value, equipment orders and sales, order backlog, and quarterly earnings trends to assess industry conditions and equipment demand.

• Supply chain mappingSemiconductor supply chain mapping

  Mapping of front-end, back-end, and materials segments in semiconductors

  The report lists suppliers across steps such as wafer manufacturing, photomasks, deposition, coating/developing, lithography, etching, cleaning, ion implantation, CMP, dicing, bonding, packaging, and testing, helping identify each company’s position in the supply chain.

• Technology roadmap analysisTechnology roadmap and advanced packaging

  Multi-layering, 3D structuring, miniaturization, advanced packaging, and X-ray metrology

  The report emphasizes the importance of advanced packaging and X-ray metrology in semiconductor technology innovation, and notes that the application opportunities for X-ray metrology are expanding from traditional mainstream optical and CD inspection fields into more segments.

Asset mapping & comparison

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

• Advantest (6857)

  A beneficiary in semiconductor test equipment, rated Overweight in the section

  Strengths

  Covers testing applications including memory, display, automotive consumer industry, and computer communication; AI and high-performance computing may increase testing complexity and demand.

  Weaknesses

  Demand is still affected by semiconductor capital expenditures, customer order timing, and the memory cycle.

  Comparison

  It is in the final test equipment segment alongside Teradyne, and both appear side by side in the report’s supply chain chart.

  Risks

  Order volatility, delayed customer capital expenditures, and weaker-than-expected memory or SoC demand.

• Disco (6146)

  A company related to dicing, grinding, and singulation technologies, rated Neutral in the section

  Strengths

  Holds a key supply chain position in grinding and dicing, and the report lists Disco as an important supplier in certain back-end equipment segments.

  Weaknesses

  Its Neutral rating suggests valuation or earnings elasticity may already be partly reflected.

  Comparison

  It is in grinder and dicer equipment segments alongside Tokyo Seimitsu.

  Risks

  Weaker-than-expected demand for SiC and advanced packaging, a downturn in equipment order cycles, and competitive or pricing pressure.

• Tokyo Electron (8035)

  A core front-end SPE equipment company

  Strengths

  The report repeatedly lists Tokyo Electron across thermal processing, deposition, coating/developing, etching, and cleaning, indicating its broad coverage of front-end processes.

  Weaknesses

  Sensitive to global fab capital expenditures and demand from regions such as China, Taiwan, and Korea.

  Comparison

  Appears alongside Applied Materials and Lam Research in deposition and etching; alongside SCREEN HD in coating/developing and cleaning.

  Risks

  A downturn in the SPE cycle, export restrictions, and changes in the regional order mix.

• SCREEN HD (7735)

  A company related to coating/developing, cleaning, and SPE sales

  Strengths

  The report lists SCREEN HD in coater/developer and cleaning system segments, and shows its order and sales trends.

  Weaknesses

  Its revenue structure is relatively sensitive to the SPE cycle and customer investment timing.

  Comparison

  Overlaps with Tokyo Electron in some process segments.

  Risks

  A decline in front-end equipment demand, delayed customer acceptance, and changes in regional sales structure.

• KIOXIA Holdings (285A)

  A NAND memory-related company, rated Overweight in the section

  Strengths

  Affected by NAND bit shipments, ASP, demand structure, and wafer output changes, and could benefit if the memory cycle improves.

  Weaknesses

  Supply-demand and pricing in the NAND industry are highly volatile.

  Comparison

  Positioned in the memory semiconductor chain, competing and cycling alongside global memory makers such as Samsung Electronics, SK Hynix, and Micron.

  Risks

  Falling NAND prices, overly rapid supply expansion, and weaker-than-expected end demand.

• Nittobo (3110)

  A company related to high-performance substrate glass cloth, rated Overweight in the section

  Strengths

  The report lists Nittobo in the packaging materials segment and shows capacity and volume-price trends for NE/NER glass and T glass.

  Weaknesses

  Demand depends on advanced packaging and high-performance substrate expansion.

  Comparison

  Alongside Ajinomoto, Mitsui Kinzoku, Sumitomo Bakelite, and Resonac, it is an important node in the packaging materials supply chain.

  Risks

  Insufficient capacity utilization, ASP declines, and slower-than-expected customer qualification or capacity expansion.

• Rigaku HD (268A)

  An X-ray metrology-related company, rated Overweight in the section

  Strengths

  The report emphasizes that X-ray is an important method in semiconductor technology innovation, and that its application opportunities are expanding into more inspection and metrology fields.

  Weaknesses

  Growth depends on the realization of demand for advanced packaging, multi-layering, and complex-structure inspection.

  Comparison

  Compared with traditional optical or CD metrology, X-ray metrology has expansion opportunities in complex structures.

  Risks

  Technology substitution, slower-than-expected customer adoption, and slower advanced packaging capital expenditure.

• HOYA (7741)

  A company related to photomasks and EUV mask blanks, rated Overweight in the section

  Strengths

  The report lists sales and capacity trends for EUV mask blanks, and the photomask chain is linked to advanced process and high-end logic demand.

  Weaknesses

  Affected by investment from high-end logic customers and fluctuations in EUV demand.

  Comparison

  The photomask chain also involves equipment suppliers such as JEOL, NuFlare, and Micronic.

  Risks

  Slower progress in advanced process adoption, customer concentration, and technology qualification risks.

Key data

• Report institutionJPMorgan Securities Japan Co., Ltd.The cover page shows analyst Mio Shikanai is affiliated with JPMorgan Securities Japan Co., Ltd.
• AnalystMio ShikanaiThe cover page lists contact information as +813-6736-1313 and mio.shikanai@jpmorgan.com.
• Conference backgroundJapan Industrial Technology Forum, August 27-28, 2026, Four Seasons Hotel Tokyo at OtemachiThis forum information is listed on the cover page.
• Share price reference date2026-07-10 and 2026-06-19Some key company charts note share prices as of 2026-07-10, while the Advantest page notes 2026-06-19.
• Key demand themesCSP capital expenditures, CoWoS, AI servers, DRAM, NAND Flash, SPESection titles explicitly cover these industry drivers.
• Examples of Overweight namesRigaku HD, KIOXIA Holdings, Nittobo, JX Advanced Metals, Nippon Electric Glass, Taiheiyo Cement, Sumitomo Osaka Cement, Advantest, HOYAThese companies are listed as Overweight in the section titles.
• Examples of Neutral namesKaneka, AGC, Nippon Sheet Glass, Disco, LasertecThese companies are listed as Neutral in the section titles.

Impact & implications

For investors, the report suggests that opportunities in semiconductor equipment and technical materials are more structural than broad beta. AI servers and CoWoS capacity expansion drive demand in advanced packaging, testing, packaging substrates, glass cloth, copper foil, cutting and grinding, and X-ray metrology; memory supply and demand, DDR5 penetration, and NAND application structure affect the memory chain and testing equipment; and SPE orders and regional sales mix determine the outlook for front-end equipment companies. Japanese companies are globally competitive in multiple high-precision equipment and materials niches, but differentiated ratings imply that valuation, earnings delivery, and end-demand assumptions still need to be validated company by company.

Risks

• AI server shipments and CSP capital expenditures coming in below JPM forecasts could weaken demand for CoWoS, testing, advanced packaging, and materials.
• Excessively rapid expansion in DRAM or NAND supply, declining ASPs, or weaker-than-expected end demand could pressure profitability in the memory chain.
• A slower-than-expected recovery in SPE orders and sales, especially if fab capital expenditures are delayed, would affect front-end equipment companies.
• Export controls, geopolitics, and changes in regional sales structure could affect shipments for Japanese equipment and materials companies.
• If adoption of technology upgrades such as advanced packaging, X-ray metrology, and EUV mask blanks is slower than expected, valuations of related companies could come under pressure.
• Fluctuations in energy, raw material, glass, chemical, and cement prices could affect margins for materials and industrial-related companies.

What to watch

• Whether the CSP capital expenditure outlook continues to be revised upward.
• The progress of TSMC and non-TSMC CoWoS capacity expansion.
• Changes in JPM’s AI server shipment forecasts.
• ASML lithography system sales estimates and the pace of advanced process investment.
• Global DRAM supply and demand, DDR5 penetration, and process migration speed.
• NAND bit shipments, ASP, wafer output, and application demand structure.
• Order and sales trends of companies such as Advantest, Disco, Tokyo Electron, SCREEN HD, Ulvac, and Tokyo Seimitsu.
• Demand for glass cloth, ultra-thin copper foil, build-up film, packaging substrates, and testing equipment in advanced packaging materials.
• Customer adoption of X-ray metrology as it expands from mainstream optical and CD fields into more segments.
• The differences in valuation and earnings delivery between Overweight- and Neutral-rated key companies.