Goldman Sachs Japan Technology: Semiconductor Capital Equipment — Favorable Conditions Continue; Ulvac Downgraded to Neutral
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs highlights continued favorable conditions for Japan's semiconductor capital equipment sector. The firm expects technology transitions—including gate-all-around (GAA) transistors, backside power delivery, and advanced packaging—to drive above-market revenue growth and margin improvement for leading companies. The global wafer fabrication equipment (WFE) market is projected to grow 8–10% annually from 2025 to 2027, supported by artificial intelligence and high-performance computing demand, with AI-related spending rising to approximately 40% of the total.
Goldman maintains Buy ratings on Tokyo Electron (TEL), Disco, Lasertec, SCREEN, and Kokusai Electric, citing their dominant positions across etch, deposition, inspection, dicing, and cleaning segments. TEL is projected to grow revenue 15% in 2025, driven by GAA and DRAM tool demand. Lasertec is expected to expand 20%, benefiting from its EUV inspection monopoly.
Conversely, Goldman downgraded Ulvac to Neutral with an unchanged target price of ¥12,000, citing declining near-term order visibility. The firm expects industry gross margins to remain in the 45–50% range, with scale efficiencies offsetting rising R&D expenditures. Japanese equipment makers are anticipated to maintain their roughly 30% global WFE market share over the next three years. Key risks include geopolitical restrictions, weaker end-market demand, and shifts in technology roadmaps.
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
