Bernstein Named Three Favorite Companies in the Japanese Semiconductor Equipment Sector

Investment company Bernstein has named three standout companies among Japan's semiconductor equipment manufacturers. According to analysts' assessment, the current performance of these companies is most significantly influenced by demand in the Chinese market and major clients' investment cycles, rather than weakening competitive positions.

Tokyo Electron ranks first, with Bernstein assigning it an "Outperform" rating and a target price of 59,200 yen. The company's reduced market share in China, in their view, is primarily linked to temporary decreases in client orders. The company is also beginning to more actively raise prices in China, where certain of its technologies are difficult to replace with local alternatives.

Kokusai Electric is the second favorite, with a target price of 8,240 yen. Bernstein believes that the company's reduced sales in China are related to a major client, CXMT, and its investment cycle, rather than strengthening of local competitors. Analysts expect that the expansion of memory chip production in China will help restore demand.

Screen Holdings was named as the third company, with Bernstein assigning it a "Market-Perform" rating and a target price of 12,600 yen. Despite the company losing some market share in China, analysts are optimistic, as they expect the return of CXMT orders as well as the conclusion of new contracts.