摩根士丹利-日本半导体生产设备：2026年一季度业绩概述-Semiconductor Production Equipment Japan Jan-Mar Results Overview-20260526

MorganstanleyMUFG

May26,202607:40PMGMT

SemiconductorProductionEquipment|Japan

Jan-MarResultsOverview

Jan-Mar2026resultsareallout.Wemaintainourbullishstanceonbothfront-endandback-endprocessfirms.

KeyTakeaways

WemaintainourAttractiveviewontheSPEindustry.Weexpectmarketgrowthforbothfront-endprocessandback-endprocessfirmsuntil2027-28.

Front-endstocksappeartohavediscountedforastrong1H.Kokusailookslikeithascatchupupsideoverthenextthreemonths.

Advantestshouldgainrenewedfocusinnext6monthsorso.Better2Hvisibility,andfromalonger-termperspective,CPO-relatednews,arepossiblecatalysts.

Jan-Marresultstakeaways:Thefront-endprocessmarketisstrongerthanitlookedlikeitwouldbethreemonthsago.Driversremainleading-edgeDRAMandleading-edgelogic,andinChinatootheoutlookisincreasinglyfornewmemoryinvestment.Forback-endprocesses,HBMcapexrecovery,acceleratedinvestmentinlogic

leading-edgepackages,andincreasedOSATdemandhasrecentlybeenconfirmed,anditwasalsonoteworthythatEMIB-T-relatedequipmentordersstartedtocomeinatmeaningfullevels.Intesting,CPOhasemergedasanimportantnewthemefrom2026,andwecontinuetoexpectstronggrowthforbothfront-endprocessandback-endprocesscompaniescenteringonAI-relateddemand.

Forfront-endprocesscompanies,neartermwelookforcatchupbyKokusai&

Ebara:Forfront-endprocessfirms,duetoleadtimes,alotof1Hproductionslotshavealreadybeenfixed,andupsidefor1Hforecastsdoesnotlookparticularlylarge.ForApr-Junearnings,theelementsthatcouldmoveforecastsevenhigherappear

limited.However,partlybecauseKokusaihasleadtimesthatarestretchingoutto8months,whenApr-Junearningscomeoutthe2Houtlookshouldhavehardened.Assuch,weseepotentialforKokusaitoreviseupguidance.ItissimilarlypossibletoexpectEbaratomakeupwardrevisionstoordertargetsasofApr-Junewhenit

reports1Hearnings.Bothcompanieshappentohavemadeoverlyconservativeremarksat1Qresults,andweexpectbothstockstomakeupforthepost-resultssharepricedeclinesoverthecourseofApr-Jun.

Revisingearningsforecasts&PTs:WereviseforecastsforourfivecoreOWstocks:TEL,Screen,KokusaiElectric,Advantest,andDisco.Forthethreefront-endprocessfirms,inresponsetoourWFEforecastincrease,wehavesharplyraisedoursales

forecasts.Fortheback-endprocessfirms,wecontinuetoseetestingandleading-edgepackagingtechnologyasclearingbottlenecksintheAIsemiconductormarket,andweremainbullishonAdvantest&DiscoandOWonboth.Inparticular,we

expectAdvantesttoenteracycleofupwardrevisionstofull-yearguidanceinto2H,andbelievethemarketstillunderappreciatesthecompany’sEPSgrowthpotential.WealsoseeincreasingvisibilityonAdvantest’searningsgrowthahead,including

opportunitiesrelatedtoCPO,andthusupgradethecompanytoourTopPick.

IDEA

MoRGANSTANLEyMUFGSEcuRiTiEsCo.,LTD.+SuzuneTamura,CFA

EquityAnalyst

Suzune.Tamura@

+8136836-8891

KazuoYoshikawa,CFAEquityAnalyst

Kazuo.Yoshikawa@

+8136836-8408

SEmiconductoRPRoductionEquipmEnt

Japan

IndustryViewAttractive

WHAT’sCHANGED

TokyoElectron(8035.T)PriceTarget

From

¥49,000

To

¥65,000

SCREENHoldings(7735.T)

From

To

PriceTarget

¥14,200

¥17,000

KOKUSAIELECTRIC(6525.T)

From

To

PriceTarget

¥6,500

¥8,300

Advantest(6857.T)

From

To

PriceTarget

¥30,000

¥36,000

TopPick

6146.T

6857.T

DISCO(6146.T)

From

To

PriceTarget

¥77,500

¥78,000

TopPick

6146.T

6857.T

Exhibit1:Ratingsandtargets

upsideto

outprice

CompanyRatingShareprice(¥)Upside

PTlastclose

TokyoElectron

OW

65,000

51,420

+26%

SCREENHoldings

OW

17,000

10,715

+59%

KOKUSAIELECTRIC

OW

8,300

7,161

+16%

Advantest

OW

36,000

26,075

+38%

Disco

OW

78,000

66,910

+17%

Source:MorganStanleyResearch

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

2

MorganstanleyMUFGIDEA

Reconfirmourbullishstanceonfront-endwaferprocessequipment:Exhibit3showsresultsforeachfirmandhowtheirsharepricesrespondedtoearningsresults.Front-endprocessfirmresultsgenerallyconfirmedtheoutlookforstrongequipmentsalesgrowthsurpassingexpectationsthroughF3/27.TokyoElectron’s(TEL's)F3/271Hsalesguidancewasfor+33%YoYgrowth(fromthistimethecompanyhasswitchedtoreleasing1H

guidanceonly),andScreen’sfull-termF3/27guidanceisfor+20%YoYgrowth.Kokusai’s2Hguidancelooksoverlyconservative,butgaugingfrom1Hwithitsrelativelyhigh

visibility,a+30%YoYgrowthtargetpointstoagrowthratenotinanywayinferiorto

TEL’s(

Exhibit2

).Ordertrendsatbothcompanieshavebuiltupevenmoremomentumoverthelastthreemonths,andweexpectsaleslevelstomoveupagainoverthecourseofF2/272H.

Exhibit2:1H&2Hsales/OPguidance

Guidance

NetSales

Operatingprofits

(¥bn)

H1

y-y

HoH

H2

y-y

HoH

H1

Cons

gap

8035TokyoElectron

1,570.0

33%

26%

NA

NA

NA

431.0

393.0

+10%

6525KokusaiElectric

152.3

30%

29%

127.7

8%

-16%

32.5

26.0

+25%

7735SCREENHoldings

317.0

16%

-4%

408.0

23%

29%

56.0

61.3

-9%

Source:Companydata,MorganStanleyResearch;Cons=VisibleAlphaConsensuspriortoearnings

Focusaheadis2HandF3/27forecastsmovingup:Onthesharepricefront,Japanese

SPEnameshaveseeminglybeenslowertodiscountforexpectationsthanEuropean&USpeers.WhenreportingOct-Decresults,Japanesecompaniessaidlittleabouttheoutlookfor2026orF2/27,andpartlybecausesharepricescontinuedtomoveupovertheendoftheyear,positivesharepricereactionsafterresultscameoutwerelimited.FortheWFEoutlooktoo,perhapspartlyduetocautiousremarksbyJapanesefirms,wesensedagapinthetonebetweendomesticandoverseasinvestors,andforJapaneseequipmentfirms

expectationswerenotparticularlyhigh,includingearningsforecasts.WithJan-Marresults,sharepricesrespondedwelltoF3/27earningsforecasts,particularlywhentheoutlookfor1Hwasstrong,butthereseemstostillbeupsidetoexpectationsfor2HandF3/28.We

thinkit'spossibletoremainbullishonJapanesefront-endprocessequipmentfirms.

BullishonKokusai&EbaraaheadofApr-Junearnings:Forfront-endprocesscompanies,duetoleadtimes,1Hproductionslotsarealreadyfixedtoaconsiderableextent,makingupside(anddownsidetoo)for1Hforecastslimited.FormostJapanesefirmswithApr-Juncorrespondingto1Q,therearelikelytobefewelementsthatwouldbringevenhigher

forecasts.TheexceptionsareKokusaiandEbara.Asnoted,Kokusaicouldwellreviseup2Hguidance.EbarahasaDecemberyear-end,andApr-Juncorrespondsto1Hearnings,andweexpectupwardrevisionstosemiconductorordertargets.WhenEbarareportedJan-Mar

results,semiconductorordershadalreadyreachedthree-quartersof1Hguidance,butthecompanymerelyexplainedthattherehadbeen“slippagewithinthesamefiscalyear”anddidnotpointtoanoverallincreaseindemand.Thatplusrestrainedfull-termorder

guidancewasreceivedpoorlybythemarkets.However,weexpectApr-Junearningsto

confirmatrendfororderstomoveupto2026from2027,andweseeupsidetoforecasts.

Manynewthemesforback-endprocess:Inback-endprocess,results&guidance

themselveswerenotasurprise,butitwasremarkablehowmanycompaniesnewly

touchedonnewthemessuchasCPOorEMIB-T.ThestockinourSPEcoveragewiththeresponsetoresultswasUshio,whichstatedthatithadobtainedEMIB-Torders,andthatback-endprocesslithographytoolsoverallwereseeingarapidrecoveryindemand,whichledtoapositivesharepriceresponse.UshioexplainedthatUMIB-Tcontributionstosales

MorganstanleyMUFGIDEA

wouldrampupfromF3/28.Amongback-endprocessfirms,weexpectDiscotobenefitaswell.InCPO,Advantestrevealedthatithadreceiveditsfirstorderfortestersforlarge-scalevolumeproduction.TheoutlookisformassproductionforswitchASICstostart

aroundmid-2027,andthisislikelytobeamajorthemeahead.TSMC(coveredbyour

analystCharlieChan)COUPEinitiativewilluseD2Whybridbonding,andweexpectDiscoandotherstobenefitaswell.

Inback-endprocessrenewedfocusonAdvantest:AsinF3/25,Advantest’sinitial

guidancewasconservative,butgivencurrentyielddifficultieswithnext-generationAIGPUs,2Htesterdemandislikelytobecorrespondinglystrong.Overthecourseof2H,ifcustomertestmenusfirm,therecouldbeupsidetocompanytargets.Alsothistime

AdvantestannouncedithadreceiveditsfirsttesterorderforCPOvolumeproduction.

AdvanteststatedthataUSrivalexpectedCPOtesterTAMof$100mnin2026and$300mn-$700mnoverthemediumterm,andthatAdvantestexpecteditsownCPO-relatedsalestoincreasemoreorless2xYoYin2027andthenanother2xormorein

2028.WebelievethatEPSgrowthpotentialisstillundervalued,andthatCPO

expectationshavesimilarlynotyetbeenpricedintothestock;welookforthevisibilityofthecompany’sprofitgrowthoutlooktoincreaseahead.

ConcernthatEUVmask-relatedequipmentexpectationsarestillrunningahead:Withinfront-endprocess,weretainacautiousviewonmask-relatedequipment.WeseerealriskofEUVmask-relatedequipmentnotcatchinguptooverallWFEgrowthin2026.The

businessenvironmenthasbottomedandisonarecoverytrend,butevenasmarketshaverespondedtostrongASMLresultsandsuchwithhighforwardexpectations,demand

trendsconfirmedbyfirmslikeLasertec&JEOLcontinuetolackpunch.

Riskstoourview:Infront-endequipment,concernsovertighterexportcontrolsonChinahaveremainedanoverhangsincethesubmissionoftheMATCHActinApril.Giventhat

JapanesecompaniesgenerallyhaverevenueexposuretoChinainthe30%range,furtherchangesrelatedtoexportcontrolscontinuetorepresentakeyriskfactor.

Exhibit3:Earningsreactionsummaryforourcoverageandoverseaspeers

Releasedate

Qactual(LCbn)

vsConsSales

OP

Pricereturn(vsIndex)

(localtime)

result

Sales

OP

Disco

04/22/2026

DecQ

133.06

58.53

+27%

+32%

-3%

Advantest

04/27/2026

DecQ

328.07

153.56

+25%

+42%

-7%

TokyoElectron

04/30/2026

DecQ

711.82

205.64

+13%

+30%

+7%

KokusaiElectric

05/13/2026

DecQ

62.02

9.49

+11%

-3%

-14%

SCREENHoldings

05/13/2026

DecQ

180.40

45.08

+30%

+104%

+10%

Ebara

05/15/2026

DecQ

246.31

26.46

+15%

+36%

-2%

Lasertec

04/30/2026

DecQ

41.28

15.20

-24%

-43%

+1%

Ulvac

05/12/2026

DecQ

67.74

6.26

+28%

+174%

-9%

Ushio

05/14/2026

DecQ

52.26

4.22

+21%

+39%

+20%

Nikon

05/08/2026

DecQ

193.26

1.09

+25%

NA

+4%

JEOL

05/15/2026

DecQ

49.55

4.62

+18%

-25%

-6%

Tekscend

05/13/2026

DecQ

33.34

7.64

NA

NA

-7%

ASML

LamResearch

AppliedMaterialsKLATencor

Teradyne

04/15/2026DecQ

04/22/2026DecQ05/14/2026JanQ

04/29/2026DecQ

04/28/2026DecQ

8.773.16

5.842.05

7.912.52

3.411.39

1.280.48

-10%-8%

+10%+10%

+16%+30%

+6%+1%

+67%+204%

-5%

-2%

+0%

-5%

-5%

Note:Pricereturnistheindex-relative1-dayreturnafterearningsannouncements(vs.TOPIXforJapan;vsS&P500forUSandvsNetherlands

AEXforASML)Source:FactSet,MorganStanleyResearch;Cons=FactSetconsensusasofearningsreleasedate

MoRGANSTANLEyMUFG3

4

MorganstanleyMUFGIDEA

WFEmarket:Upwardrevisionsto2026outlook,rapidgrowthfor2027hascomeintoviewalso

CY26-27WFEoutlookbright:

Exhibit4

showstheWFEforecastsofdifferentmajor

front-endprocessSPEmakers.Everycompanyhasraiseditsforecastsfromthreemonthsago,confirmingthatmomentumhasimprovedagaininthelastmonth.Themainchangesinthe26WFEforecastscomparedwiththreemonthsagoareasfollows:(1)themovingforwardofDRAMdemand,(2)higherChinaWFEforecasts,and(3)upwardrevisionsto

NANDforecasts.For(1),industryfirmsallmadeupwardrevisions.Viewson(2)theChinamarketand(3)theNANDmarketaremainlybasedonremarksbyTokyoElectron(TEL),butthecompany’s2026WFEforecastsareclosetoourownview.

TEL’sWFEforecasts:Whenitreportedresults,TELputits2026-2027WFEforecastat$150-170bn.Thecompanygavearangebecauseyear-endorderscouldcomeearlieror

later,butusing$150bnfor2026and$170bnfor2027,basedona2025WFEmarketsizeof$124bn,givesgrowthratesof+21%and+13%YoY.ThelatestWFEforecastsputoutbyourglobalteamarefor+27%growthin2026($149n)and+28%growthin2027($191bn).For2027inparticularitlookslikethereisstillalotofupsidecomparedwithTEL’s

statements,butitseemsquitepositivethatasof20261Hthecompanyhasbecomesobullishon2027.

Exhibit4:KeySPEmakers'WFEmarketgrowthoutlookfor2026asofJan-Mar2026results

YoY

TokyoElectron

KokusaiElectric

SCREENHD

LamResearch

KLA

WFEoutlook

up>=+20%

up+15%

up+15~20%

up+27%

upMid/Highteen

DRAM

up>=+30%

up+25~30%

up+20%-~+25%

-

-

NAND

up+40%

up+15%

upcloseto+15%

-

-

Logic/Foundry

up+10~15%

up+5~10%

up>+20~25%

-

-

China

closetoup20%

down5%

Flattish

Flat~slightlyup

flat~slightlyup

Prev.QWFEoutlook

up>=+15%

up+10%

up+10~20%

up+23%

upHSD~LDD

DRAM

up>=+20%

up+20%

up>+20%

-

up+15~20%

NAND

flat~slightlyup

up+15%

-

-

lowerthanDRAM

Logic/Foundry

up+15~20%

up+3%

up>+20%

-

up+10~15%

China

Flat

down5%

-

Flattish

flat~slightlyup

Source:Companydata,MorganStanleyResearch

DriversforpotentialupsideaheadareinNorthAmericanleadinglogicIDMsand

TeraFab.TheNorthAmericanIDMs(integrateddevicemanufacturers)arecustomers

whereJapanesevendorshavehighshare,andwhencapexrecovers,companiessuchasTELandNikonarelikelytobenefit.Bothcompanieshaveindicatedthattheyhaveyetto

confirmapickupindemandfromtheNorthAmericanIDMs.Fornow,itappearstheyarerespondingthroughequipmentrelocation,butadditionalcapexdemandislikelyto

emergeovertime.RegardingNorthAmericanIDMs'maskshops,ourunderstandingisthatthereisexcesscapacitycurrent,andthuswedonotexpectnear-termbenefitsfor

Lasertec

.TeraFab

hasdisclosedinitialinvestmentof$55bnandtotalestimated

investmentof$119bn.Assuming70-75%isallocatedtoWFE,theinitialinvestmentalonewouldamounttoaround$40bn,whichissubstantial.GiventhatitwillusetheNorth

AmericanIDMprocesses,benefitsarelikelytoaccruetoJapanesevendorswithrelatively

MoRGANSTANLEyMUFG5

MorganstanleyMUFGIDEA

strongrelationships.Thetimelineforfull-scaleequipmentinstallationhasnotyetbeendisclosed.

Mask-related

ForEUVmask-relatedequipment,ourviewremainsthatdemandrecoverywillbeslower

comparedwithotherfront-endequipment.WhileLasertec’sbusinessconditionsare

improving,commentsregardingmaskshopinvestmenthavenotchangedversusthreemonthsago.Similarly,JEOL’sbusinessherehasbottomed,butitsF3/27planformulti-beammaskwritershipmentsisonlysixunits(uponeunitYoY),indicatingnomeaningfulrecovery.

Ontheotherhand,fab-sidedemandisstrong,andLasertechasraisedF6/26order

guidancefrom¥170.0-220.0bnto¥200.0-240.0bn.Thecompanyplansforordersin2H2026tobeflatHoH,with1H2027alsoflat,implyingF6/27ordersofaround¥300.0bnatthemidpoint.OrdertrendsfortheA200HiTrepresentfurtherupsidetotheF6/27

outlookaswell.WhileinvestorexpectationsforA200HiTarehighforLasertec,visibilityonactualunitdemandisexpectedtowardend-2026,suggestinglimitedupdatesuntilthen,forbetterorworse.

Single-beammaskwritersforChinadecelerating:JEOL’ssingle-beammaskwritersareprimarilyshippedtoChina,butshipmentsarelikelytodeclinefrom12unitsinF3/26tofiveunitsinF3/27(downsevenunitsYoY).Regulatoryapprovalformulti-beammask

writerexportstoChinawouldpotentiallysparkareaccelerationinthemaskwriter

businessforJEOL,butfornowbothsingle-beamandmulti-beammarketsarelikelytoremainchallenged.

TekscendannouncesadditionalinvestmentinKorea:ThecompanyplanstobuildathirdplantonavailablelandatitsexistingIchon,Koreasite.Theplantisscheduledfor

completionin2027,withproductionstartinginlate2028,targetingadvancedmasksof

14nmandbelow.Customersareincreasinglyrequiringproductionclosertotheirlocations,andcompetitorPhotronics(notcovered)hasalsoannounced6/8nminvestmentinKorea.AstheleadingKoreanmemorymanufacturerconcentratesresourcesonEUVmasksandhigh-endmemorysuchasHBM,outsourcingofadvancedphotomasks,whichhad

previouslybeenproducedin-house,isincreasing.Notonlyfoundrybutalsomemory

playersarebeginningtooutsourcegeneral-purposeDRAMmasks,raisingexpectationsforexpansionofthemerchantmaskmarket.

6

MorganstanleyMUFGIDEA

Earningsforecastsandpricetargets

WehaverevisedourearningsforecastsforourOverweightstocks:Thethreecore

front-endprocesscompaniesofTokyoElectron,ScreenHoldings,andKokusaiElectric;andthetwocoreback-endprocesscompaniesofAdvantestandDisco.InF3/27-28,weexpectstronggrowthinthememoryWFEmarket,andinF3/28-29welookforNorthAmericanIDMinvestmentrecoveryandcontinuedTaiwanfoundryinvestment.Againstthis

backgroundlogicshouldoutperform.Forback-endprocesscompanies,wecontinuetoseetestingandleading-edgepackagingtechnologyasclearingbottlenecksintheAI

semiconductormarket,andweremainbullishonAdvantestandDisco.

Exhibit5:Ourearningsforecasts

NewForecasts

Actual26/3

MSe

27/3

YoY

MSe

28/3

YoY

MSe

29/3

YoY

Sales(¥bn)

TokyoElectron

2,443.5

3,396.0

39%

4,087.0

20%

4,546.0

11%

SCREENHoldings

605.7

739.7

22%

861.2

16%

973.2

13%

KOKUSAIELECTRIC

235.1

321.2

37%

377.8

18%

399.9

6%

Advantest

1,128.6

1,563.5

39%

2,182.9

40%

2,641.8

21%

Disco

436.9

579.8

33%

679.0

17%

780.0

15%

OperatingIncome(¥bn)

OPM

OPM

OPM

TokyoElectron

624.9

988.0

29%

1,358.0

33%

1,607.0

35%

SCREENHoldings

122.5

164.9

22%

199.8

23%

236.4

24%

KOKUSAIELECTRIC

41.8

73.2

23%

93.4

25%

97.5

24%

Advantest

499.1

736.7

47%

1,097.9

50%

1,348.2

51%

Disco

185.0

263.8

45%

321.0

47%

379.8

49%

EPS(¥)

TokyoElectron

1,255

1,644

31%

2,256

37%

2,667

18%

SCREENHoldings

487

636

31%

765

20%

903

18%

KOKUSAIELECTRIC

129

232

80%

297

28%

310

4%

Advantest

515

751

46%

1,120

49%

1,375

23%

Disco

1,250

1,802

44%

2,192

22%

2,592

18%

Source:MorganStanleyResearch;MSe=MorganStanleyResearchestimates

Exhibit6:Ouroldforecasts

OldForecasts

Actual26/3

MSe

27/3

YoY

MSe

28/3

YoY

Sales(¥bn)

TokyoElectron

2,443.5

3,130.0

28%

4,080.0

30%

SCREENHoldings

605.7

779.5

29%

908.5

17%

KOKUSAIELECTRIC

235.1

296.0

26%

386.0

30%

Advantest

1,128.6

1,540.0

36%

2,440.0

58%

Disco

436.9

631.0

44%

839.0

33%

OperatingIncome(¥bn)

OPM

OPM

TokyoElectron

624.9

931.0

30%

1,453.0

36%

SCREENHoldings

122.5

175.3

22%

227.7

25%

KOKUSAIELECTRIC

41.8

64.6

22%

102.7

27%

Advantest

499.1

781.0

51%

1,402.0

57%

Disco

185.0

312.0

49%

455.0

54%

EPS(¥)

TokyoElectron

1,255

1,574

25%

2,451

56%

SCREENHoldings

487

639

31%

835

31%

KOKUSAIELECTRIC

129

204

58%

327

60%

Advantest

515

833

62%

1,498

80%

Disco

1,250

2,133

71%

3,089

45%

Source:MorganStanleyResearch;MSe=MorganStanleyResearchestimates

MoRGANSTANLEyMUFG7

MorganstanleyMUFGIDEA

TokyoElectron(OW;PT¥65,000)

WehaveappliedaP/Eofalmost30xtoourF3/28EPSestimateof¥2,256toreachour¥65,000pricetarget.ForourP/Ewehaveusedthe1-yearforwardweeklyP/EaveragefromOct2025,whenthecurrentSPEupcyclestarted,tillnow.ThepaceofmemorypriceincreasehassettledbackcomparedwithSep2025,andourbasecasedoesnotdiscountforafurtherincreaseinfromhereinmultiples,whichhavealreadymovedhighertogetherwithmemorypriceincreases.Meanwhile,ourDRAMWFEforecastsare+44%YoYto

$45bnin2026and+28%YoYto$57bnin2027.Ifinvestmentisattheselevels,itdoesnotmeanamajoreasingofthesupply/demandbalancerelativetopotentialbitdemandgrowthof+40%.Weexpectcurrentvaluationlevelstocontinuefornow,duringthe

upcyclephase.

Exhibit7:DDR5spotpriceshavesurgedsinceSep2025

(8Gb;$)

20

18

16

14

12

10

8

6

4

2

0

DDR54800/560016Gb2Gx8AverageSpotUSDDDR548008Gb1Gx8AverageContractUSD

(16Gb;$)DDR5price

40

35

30

25

20

15

10

5

0

Source:FactSet丿MorganStanleyResearch

Earningsforecasts:InresponsetostrongF3/271Hforecasts,wehaverevisedupour

salesestimates.ForF3/27asawholewelookforrevenuetoincrease+39%YoYto

¥3.4trn.For2027Jan-Mar,giventheschedulefornewfabstorampup,weexpectstronggrowthcomparedwith2026Jan-Mar.WeaccordinglylookforJapanesefront-endprocess(waferprocess)equipmentfirmstohaveF3/27growthratesmuchhigherthantheCY26WFEgrowthrate(whichweprojectat+27%YoY).Weexpect1Hsalestorise+34%YoY,inlinewithcompanyguidanceofa+33%YoYincrease(¥1.57),andweexpectH2salestoriseHoHinlinewithitscommentsto¥1.82trn(+44%YoYgrowth,+16%HoHgrowth).We

lookforF/27OPtoincrease+58%YoYto¥988,withOPMof29%.InF3/28wealsoexpectstrongsalesgrowthcenteringonmemoryandfoundry/logic.

Weexpectmid-termplanOPmargintargetof35%willbeachievedinF3/29:ForF3/28,weforecastrevenuegrowthof20%YoYandOPgrowthof37%YoY,withcontinued

strongrevenuegrowthdrivenmainlybymemoryandfoundry/logic.Inparticular,ifthepreviouslymentionedupsidefromNorthAmericanIDMsmaterializes,thiswouldbeatailwindforTokyoElectron,whichhasrelativelyhighershareexposure.ForF3/29,weassumerevenuegrowthof11%YoYandOPgrowthof18%YoY.Whileweexpectsome

8

MorganstanleyMUFGIDEA

moderationinmemoryinvestment,webelievetop-linegrowthcancontinue,supportedbyexpandingfoundry/logicinvestment.WeestimateF3/29OPmarginat35.3%,indicating

themid-termtargetisachievable.Thecompanyplanstosupporton-the-ground

negotiationsbyformallyannouncingpriceincreases.Ourforecastsincorporateanet

+3pptimpactfrompriceincreasesafteraccountingforcostinflation,butgivenfurtheryendepreciation,moreaggressivepricingcouldbefeasible,implyingadditionalupsideto

profitability.

Exhibit8:TokyoElectronequipmentsalesbreakdown

(JPYmn)

Equipmentsalesbreakdown

24/3

25/3

26/3

27/3

MSe

28/3

MSe

29/3

MSe

Equipmentbyapplication

1,372,700

1,861,100

1,775,400

2,542,000

3,111,000

3,504,000

DRAM

370,629

576,941

550,374

826,000

950,000

950,000

NVM

96,089

130,277

177,540

302,000

393,000

432,000

Logic/Fondry

905,982

1,153,882

1,047,486

1,414,000

1,768,000

2,122,000

y-y

-19%

36%

-5%

43%

22%

13%

DRAM

56%

56%

-5%

50%

15%

0%

NVM

-72%

36%

36%

70%

30%

10%

Logic/Fondry

-19%

27%

-9%

35%

25%

20%

Copositionratio(%)

DRAM

27%

31%

31%

32%

31%

27%

NVM

7%

7%

10%

12%

13%

12%

Logic/Fondry

66%

62%

59%

56%

57%

61%

Source:Companydata丿MorganStanleyResearch丿MSe=MorganStanleyResearchestimates

MoRGANSTANLEyMUFG9

MorganstanleyMUFG