Original source：Goldman SachsFirst published on Unhidea：Original source date：
Key takeaway
Growth in Japanese semiconductor equipment sales is accelerating and demand comes from a broad range of sources. Goldman Sachs believes earnings growth across the industry in the next fiscal year has high visibility, provided capacity and component supplies are not disrupted, and that HOYA and Disco offer attractive valuation-based risk-reward profiles.
How fast are equipment sales growing?
Data from the Semiconductor Equipment Association of Japan (SEAJ) show that average monthly sales of Japanese semiconductor production equipment in the period from month 7 through September of 2026 were 629 billion yen, up 48% year on year and 22% quarter on quarter, well above the previous quarterly record.
Year-on-year growth also accelerated from 27% in the period from month 4 through June to 48% in the period from month 7 through September, indicating that sales growth was not merely a temporary quarter-on-quarter rebound.
Which equipment and customers supported growth?
SEAJ said several categories, including front-end equipment, wafer processing equipment and testing equipment, contributed to growth; no single equipment type alone supported sales.
By region and customer type, shipments to Taiwanese foundries and South Korean memory chip makers were strong, while shipments to mainland China also continued to exceed expectations. Demand across multiple segments and regions underpins Goldman Sachs’ view that equipment demand remains strong.
Why does Goldman Sachs favor the two companies, and on what conditions?
Despite strong performance, equipment sector shares have continued to fall. Goldman Sachs believes equipment demand could support earnings growth in the next fiscal year, provided no problems arise with capacity or component procurement.
Based on share prices on 23 October 2026 and Goldman Sachs’ earnings forecasts for fiscal 2027, HOYA and Disco trade at price-to-earnings ratios of 25.7 and 18.2 respectively, about 12% and 20% above their respective lows over the past five years. Goldman Sachs believes both are near historical valuation lows and offer attractive risk-reward profiles.
Goldman Sachs rates both companies Buy, with 12-month price targets of 36000 yen for HOYA and 105000 yen for Disco. The industry outlook also faces changes in demand: risks Goldman Sachs lists for Disco include slowing demand in China, tighter export controls and slowing AI-related demand.
