Despite quarterly profits missing market expectations, Tokyo Electron still raises its performance target
Special Report: Focus on US Stocks Q4 2025 Earnings
Although its quarterly profits fell short of market expectations, Tokyo Electron Limited has raised its full-year performance forecast and stated that driven by the AI investment boom, capital expenditure on equipment by chip manufacturers will see significant growth.
The semiconductor equipment supplier now expects operating profit for the fiscal year ending March 2026 to reach 593 billion yen (approximately $3.8 billion), an increase from the previous forecast of 586 billion yen, but still below market expectations.
Tokyo Electron stated that demand for DRAM (Dynamic Random-Access Memory) manufacturing equipment is particularly strong, covering both high-bandwidth memory and traditional DRAM chip-related equipment, and this trend is expected to continue for several years. At the same time, procurement momentum among Chinese memory chip manufacturers has slightly cooled, and domestic logic chip manufacturers have also postponed equipment delivery schedules.
At the earnings briefing on the 6th, the company's head of finance, Hiroshi Kawamoto, said: "Customer inquiry demand is extremely strong. If customers' cleanroom capacity constraints and procurement bottlenecks can be resolved quickly, the company expects to achieve more than 20% growth in performance this year."
In the December 2025 quarter, Tokyo Electron achieved an operating profit of 116.14 billion yen, far below analysts' average expectation of 158.6 billion yen. Kawamoto noted that due to the product shipment schedule, sales for the quarter were "slightly underwhelming." In addition, Tokyo Electron announced a share buyback plan of up to 150 billion yen.
From Amazon and Alphabet to Alibaba, global tech giants and sovereign wealth funds are investing hundreds of billions of dollars in data centers, chips, and other hardware, vying for leadership in the artificial intelligence sector.
Tokyo Electron's clients include industry leaders such as TSMC and Samsung Electronics, and the company has benefited from growing demand for advanced chip manufacturing equipment. However, amid intensifying US-China tech competition, this Japanese firm also faces challenges brought by related export control measures.
TSMC plans to adopt 3nm chip manufacturing technology in its second new plant in Japan, and Tokyo Electron is expected to further benefit from this development.
Editor: Guo Mingyu
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The 5% U.S. Treasury yield storm is coming! The refinancing time bomb countdown begins—who will be the first victim?
The 10-year US Treasury yield has surpassed 5%, reaching a new high since 2007. The longer high interest rates persist, the greater the refinancing pressure will be on real estate companies, commercial real estate, and highly indebted firms, with systemic risks likely to accelerate and emerge within the next 12 to 18 months.
Don't Fight the Profit Cycle! Will U.S. Stocks Break 8,000 Points This Year?
Jefferies predicts that, driven by the dual engines of the AI investment boom and stronger-than-expected corporate earnings, the S&P 500 index is expected to soar to 8,000 points by the end of 2026 and further reach 9,000 points in 2027. AI-driven profit expansion has spread from the "Magnificent Seven" to the entire market, with the S&P 500's EPS forecast to surge by 35% this year, far exceeding market consensus—marking the strongest earnings supercycle since 1995! The only real threat: if US Treasury yields continue to spike, the risk of valuation compression cannot be ignored.
Will “continual learning” AI extend the memory “shortage” until 2031?
Citi believes that as AI enters the era of "continuous learning" beyond simple training and inference stages, demand for HBM, server DDR5, and enterprise SSDs (eSSD) will experience explosive and simultaneous growth starting from 2027. While demand will surge rapidly, the supply side is constrained by HBM production capacity usage and slower technology migration, leading to expansion lagging far behind demand. This supply-demand imbalance is expected to continue until 2031.
Crypto prices
More
