Mid-Tier Chip Equipment Makers FY2026 Full Year: AI Demand Splits Earnings

The semiconductor industry is booming due to the rapid spread of generative AI, driving robust investment in high-performance devices, particularly for data centers. Conversely, investment in power devices has slowed down, and flat panel displays (FPD) remain in a prolonged slump. This uneven demand has polarized corporate earnings, though current order books remain extremely strong, prompting mostly bullish forecasts for the upcoming fiscal term.

The clear winner this term is Accretech, which grew sales by 10.8% year-on-year to 166.8 billion yen. Operating profit rose 13.6% to 33.7 billion yen, buoyed by the company successfully capturing generative AI demand to post a high operating margin of 20.2%. On the other hand, Nomura Micro struggled, with revenue plummeting 41.6% to 56.2 billion yen and operating profit sinking 56.6% to 6.7 billion yen. The decline was primarily a reaction to large-scale projects wrapping up in the previous fiscal year, which the company views as a temporary transition phase before orders bounce back to projected record highs in the next term.

Shibaura successfully completed a major transition, shifting its main focus from FPD to back-end packaging equipment for generative AI, yielding growth in both sales and profits on the back of advanced packaging systems. Rorze leveraged its strength in wafer transfer systems, performing well with advanced logic customers in Taiwan. Despite booking one-off extraordinary losses, its operating profit margin reached 24.2%, leading all five companies. Meanwhile, ULVAC saw a massive surge in bookings, with order volume jumping 43.7% year-on-year to 324.2 billion yen. High material costs dragged down its profits, but its long-term outlook remains exceptionally strong.

The major players face several shared risks:

• Dependence on the Chinese market and the impact of its investment slowdown
• Foreign exchange fluctuations affecting profitability
• Rising raw material and energy costs squeezing margins
• Delayed project commencements due to shifts in client investment timelines

This sector is home to high-performing companies that punch far above their level of public recognition. The profitability of firms like Rorze and Accretech is remarkable, as manufacturing companies rarely achieve operating margins above 15%. Boasting superior technological capabilities and global reach, their overwhelmingly high profitability remains their biggest draw. For both investors and job seekers, this is a sector that demands close attention.