Jefferies Names Top Japan Semiconductor Equipment Stocks to Buy

Jefferies has identified three key Japanese semiconductor equipment companies as top stock picks, driven by the booming artificial intelligence and high-performance computing sectors. Tokyo Seimitsu (7729.T) led the list, with its price target lifted to ¥24,000 from ¥23,000, based on a 25x fiscal 2028 earnings estimate. The company reported a 19% year-over-year jump in first-quarter sales to ¥36.7 billion and operating profit of ¥5.9 billion, up 29%.

Tokyo Seimitsu's semiconductor segment saw a remarkable 21% sales increase to ¥28.5 billion, with AI and HPC orders exceeding ¥13 billion, more than double the previous year. First-quarter orders reached an all-time high of ¥53.2 billion, up 102% year-over-year and 47% quarter-over-quarter. The company raised its 2027 sales forecast to ¥189.0 billion, surpassing its medium-term goal.

Rorze Corp (6323.T) also received a price target upgrade to ¥6,000, with Jefferies raising its 2027 operating profit forecast to ¥44.0 billion and 2028 estimate to ¥52.0 billion. First-quarter sales grew 12% year-over-year to ¥37.2 billion, with operating profit up 21% to ¥10.2 billion. Semiconductor orders reached ¥42.0 billion, 1.9 times the prior-year level, with strong demand from Chinese equipment and semiconductor manufacturers.

Advanced packaging applications and specialized equipment orders saw significant increases. The company reached a semiconductor-related equipment order backlog of ¥62.2 billion by the end of the first quarter.

Advantest Corp (6857.T) topped the list with its price target increased to ¥41,000 from ¥38,500, reflecting a 35x fiscal 2028 earnings estimate based on its high profitability. First-quarter sales surged 39% year-over-year to ¥367.5 billion and operating profit exploded 53% to ¥190.0 billion, both setting new record highs. SoC tester sales grew 36% year-over-year to ¥259.6 billion, while memory tester sales rose 43% to ¥48.0 billion.

The company raised its 2026 SoC tester market outlook to $10.5-11.5 billion, indicating a 59% year-over-year growth. Fiscal 2027 guidance was revised upward to ¥1.714 trillion in sales, a 51% year-over-year increase, and ¥846.0 billion in operating profit, a 69% jump.