Investing.com — Bernstein outlined three stocks as its top picks among Japanese semiconductor equipment makers, highlighting how China market dynamics and customer investment cycles are shaping near-term performance rather than fundamental competitive shifts.
The broker’s analysis focuses on three major players in the sector, each navigating different challenges tied to Chinese customer demand patterns and local competition pressures. Bernstein emphasized that recent China market share losses for these companies largely reflect timing and customer mix factors rather than structural erosion of their competitive positions.
Bernstein rates Tokyo Electron Outperform with a price target of 59,200 yen. The broker said the company’s China market share loss in 2025 was driven primarily by customer mix and investment timing rather than structural competitive erosion, noting that key customer CXMT significantly reduced orders last year. Bernstein added that Tokyo Electron had historically priced less aggressively than peers, which cost the company market share as the yen depreciated. Going forward, the broker said Tokyo Electron was becoming more vocal on pricing in China, where certain tools remain difficult to replace with local alternatives, and was introducing surcharges for cost increases and expedited delivery.
Bernstein rates Kokusai Electric Outperform with a price target of 8,240 yen. The broker said the company’s 2024-2025 China share loss was heavily tied to CXMT’s investment cycle, with estimated CXMT-related revenue falling from roughly 47 billion yen in 2024 to around 11 billion yen in 2025. Bernstein said local competition had not yet fully caught up in Kokusai’s core thermal process areas, making the 2025 China import data an unreliable guide for the investment thesis. The broker added that China’s memory capacity expansion cycle should support demand recovery, while near-term upside and downside remained more driven by capacity constraints than competitive dynamics.
Screen Holdings
Bernstein rates Screen Holdings Market-Perform with a price target of 12,600 yen. The broker said the company’s 2025 China market share decline was driven by order timing and customer localisation attempts, with CXMT placing no meaningful orders over the past two years as it sought to build out a domestic equipment base. A further blow came from Swaysure, a major Screen customer in China’s DRAM segment, which ceased investment in 2025. Bernstein said it had grown more constructive on Screen following a recent company call, citing expectations that CXMT orders would return, a sizeable new order from JHICC, and YMTC ordering roughly 1.5 times what it purchased the prior year.
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