Goldman Sachs maintains a Buy rating on DISCO, expecting generative AI and advanced packaging to keep driving shipment growth

Overview

This report summarizes the key points from Goldman Sachs's conference call with DISCO's IR team on the morning of May 12, 2026. The report focuses on demand for generative AI-related equipment, views on production capacity, and future growth drivers. Although the stock has been trading sideways since earnings, Goldman Sachs still believes quarterly shipment levels can improve further and reiterates its Buy rating.

Core views

The core view is that DISCO's growth story remains intact: investment appetite for HBM and advanced packaging is strong, FY3/27 demand for HBM-related equipment is likely to stay elevated, general DRAM back-end equipment demand may expand as wafer allocation progresses, demand for logic and advanced packaging application equipment continues, OSAT demand is increasingly showing up as equipment shipments, and demand for passive component equipment such as MLCCs, inductors, and switches around AI servers is also expanding. Looking ahead, CPO and NAND hybrid bonding may create new high-value-added equipment opportunities.

Analysis framework

The report combines conference call notes with fundamental forecasts, first organizing DISCO management/IR's comments on demand, capacity, and new technology opportunities, then combining Goldman Sachs's forecasts for revenue, profit, EPS, and valuation multiples to support the Buy recommendation and target price.

Methodology notes

• Valuation methodsEV/EBITDA Relative Valuation

  12-month price target

  The ¥86,000 target price is based on FY3/27E-FY3/28E EBITDA forecasts, the global SPE industry average 18x EV/EBITDA, and a 50% relative premium to the industry to reflect DISCO's high profitability; the target implies FY3/27E P/E of 46x and P/B of 13x.

• FundamentalsConference Takeaways Method

  Demand and capacity validation

  Through conference calls with the DISCO IR team, the report validates demand trends for generative AI-related equipment, HBM, advanced packaging, OSAT, passive components, and future CPO/NAND hybrid bonding, while assessing three capacity constraints: production space, personnel, and components.

• Risk frameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  Goldman Sachs Factor Profile compares a stock's relative position versus the market and peers using growth, financial returns, valuation multiples, and a composite measure; growth is based on forward sales, EBITDA, and EPS growth, financial returns on ROE, ROCE, and CROCI, and valuation multiples on P/E, P/B, EV/EBITDA, and other metrics.

• M&AM&A Rank

  M&A likelihood score

  Goldman Sachs ranks covered companies' M&A likelihood from 1 to 3; DISCO's M&A Rank is shown as 3 in the report table, which typically indicates a low probability of M&A and is not included in the target price.

Asset mapping & comparison

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

• DISCO (6146.T)

  Research target; semiconductor manufacturing equipment company

  Strengths

  Benefiting from demand related to generative AI, HBM, advanced packaging, logic applications, OSAT, and potential CPO/NAND hybrid bonding; a high mix of high-value-added products; and the company has been securing production space and personnel in advance.

  Weaknesses

  Some new demand areas are still relatively small at present, such as OSAT and passive component-related equipment; HBM investment timing and scale may vary across customers.

  Comparison

  The valuation method uses the global SPE industry average 18x EV/EBITDA, with a 50% relative premium to reflect DISCO's high profitability; the rating is positioned relative to covered peers including Advantest, Ebara, HOYA, JEOL, Kioxia Holdings, Kokusai Electric, Lasertec, SCREEN Holdings, Tokyo Electron, Tokyo Seimitsu, and Ulvac.

  Risks

  Yen appreciation versus the U.S. dollar, weaker demand in China or tighter export controls, slower AI-related demand, market share loss, and margin deterioration.

• HBM-related equipment

  Current core demand driver

  Strengths

  1Q3/27 shipments are expected to increase sequentially, investment appetite for advanced packaging remains strong, and FY3/27 demand is expected to stay elevated.

  Weaknesses

  Investment timing and scale may differ across customers.

  Comparison

  Compared with general DRAM, current front-end wafer capacity is being prioritized for HBM, but demand for general DRAM back-end equipment may expand later.

  Risks

  Changes in the HBM investment cycle or slower AI demand could affect orders.

• CPO and NAND hybrid bonding-related equipment

  Future potential growth driver

  Strengths

  CPO may require high-precision multi-chip integration, driving demand for dicing saws, grinders, and high-cleanliness grinders in complex packaging; if NAND makers expand the use base for hybrid bonding, the large scale of NAND could create a meaningful growth opportunity.

  Weaknesses

  CPO processing methods are still being discussed, and the demand environment for NAND hybrid bonding has not changed materially versus three months ago.

  Comparison

  Similar to HBM and 2.5D packaging, complex packaging could increase demand for DISCO's core equipment.

  Risks

  Technical route, adoption speed, and customer capex remain uncertain.

Key data

• RatingBuyGoldman Sachs reiterates its Buy rating.
• 12-month price target¥86,000Based on FY3/27E-FY3/28E EBITDA and relative valuation.
• Current price¥72,800Closing price on May 12, 2026.
• Implied upside18.1%Upside versus the current price.
• FY3/27E revenue¥567.5bnGoldman Sachs forecast.
• FY3/27E operating profit¥274.1bnGoldman Sachs forecast.
• FY3/27E EPS¥1,884.5Goldman Sachs forecast.
• FY3/27E P/E38.6xTable forecast basis.
• FY3/28E revenue¥659.9bnGoldman Sachs forecast.
• FY3/28E operating profit¥332.8bnGoldman Sachs forecast.
• Market cap¥7.9tr / $50.3bnDisclosed in the report table.
• Enterprise value¥7.5tr / $47.9bnDisclosed in the report table.
• 3-month average daily trading value¥162.1bn / $1.0bnDisclosed in the report table.

Impact & implications

If Goldman Sachs's view proves correct, DISCO will continue to benefit from rising equipment complexity driven by AI servers, HBM, advanced packaging, and future CPO/NAND structural changes. A higher mix of high-value-added products should help offset raw-material or supply-chain pressure and support earnings above consensus. For investors, the key question is whether demand will broaden beyond HBM into general DRAM back-end, OSAT, CPO, and NAND hybrid bonding, and whether capacity expansion can keep pace with order upside.

Risks

• Yen appreciation versus the U.S. dollar may affect earnings and valuation.
• Weaker demand in China or tighter export controls could weigh on semiconductor equipment demand.
• A slowdown in AI-related demand would weaken growth momentum for HBM, advanced packaging, and related equipment.
• DISCO may face market share loss.
• Margin deterioration would weaken the valuation premium supported by its high profitability.
• HBM customer investment timing and investment scale remain volatile.
• Supply-chain constraints and component procurement pressure are currently expected to have limited impact, but still need to be monitored.

What to watch

• Whether 1Q3/27 HBM-related equipment shipments increase sequentially.
• Whether FY3/27 investment in HBM and advanced packaging remains elevated.
• Whether back-end equipment demand expands after wafer allocation for general DRAM progresses.
• Whether OSAT demand gradually scales up and translates into equipment shipments.
• Whether demand for passive component equipment around AI servers continues to expand.
• Capacity flexibility created by the new Gohara plant, the Kuwabata main plant, and engineer support at manufacturing sites.
• Whether CPO packaging technology routes increase demand for dicing saws, grinders, and high-cleanliness equipment.
• Whether the range of NAND hybrid bonding adopters expands.
• Changes in the yen, China demand, export controls, and AI demand.