Japan’s largest semiconductor companies delivered mostly positive September-quarter results, with artificial intelligence-related demand supporting revenue and profits. However, their shares reacted unevenly as investors focused on whether the pace of AI-related growth can continue and whether expectations have become too high.
Advantest and Tokyo Electron reported stronger-than-expected results and issued positive guidance. Advantest raised its fiscal 2027 operating-profit forecast to ¥967 billion from ¥846 billion after first-half revenue increased 60.5% and operating profit climbed 96.5%. Management said demand for testing AI chips was growing faster than expected.
Tokyo Electron forecast an 87% increase in operating profit to ¥1.17 trillion. Its chief financial officer said there were no signs that the current growth was slowing. The company also announced a ¥150 billion share buyback.
Other companies faced a more cautious market response. Kioxia’s forecast for third-quarter operating profit of ¥2.0 trillion was below the ¥2.35 trillion analysts had expected. The company also faces moderating NAND price increases, while China’s YMTC overtook it in shipments. Leveraged long positions contributed to the stock’s decline, according to the report.
Disco’s revenue was in line with expectations, but earnings per share missed forecasts. Despite that result, consensus estimates still call for December-quarter EPS of 461.87, compared with 425.33 in the latest quarter.
Renesas posted a reported 199% EPS beat, although the result may not represent a sustainable earnings rate. Consensus estimates for the following quarter stand at 70.53, compared with reported EPS of 204.02. The report described this interpretation as an inference rather than a statement from the company.
The outlook remains strongest for semiconductor equipment makers. Consensus estimates put Advantest’s fiscal 2027 EPS at about 1,005, roughly double the estimated 515 for fiscal 2026. Tokyo Electron’s EPS is expected to rise to around 350 from 251.
Memory remains the main uncertainty. Kioxia’s consensus fiscal 2027 revenue estimate is ¥10.16 trillion, compared with ¥2.34 trillion in fiscal 2026, an outlook that depends on the pricing recovery continuing. Recent management commentary has cast doubt on that assumption.
Investor sentiment has also become a significant pressure point. Concerns about AI spending followed weak U.S. earnings reports on October 29 and 30, while the Nikkei fell 2.1% on October 30. A hawkish Bank of Japan stance added to the pressure, making strong results alone insufficient to support every stock.
As of November 2 at 1:07 p.m. Japan time, Tokyo Electron was up 6.95% at ¥10,175 and Advantest had gained 4.16% to ¥36,310. Disco was up 2.52%, while Renesas rose 1.61%. Kioxia fell 14.63% to ¥11,500, indicating that concerns about the memory outlook had intensified.
The results leave investors weighing continued strength in AI testing and equipment demand against the risk that high valuations could suffer if AI capital spending slows. Advantest, for example, was trading at 45.3 times trailing earnings, leaving limited room for weaker growth.
Sources: Investing.com News.