Key facts
- Tokyo Electron expects operating profit to reach 1 trillion yen for the fiscal year ending March 2027.
- This represents a 60% increase from the previous fiscal year.
- The growth is fueled by surging demand for AI-related semiconductor manufacturing equipment.
- The company plans to increase the share of AI-related equipment in its total wafer fab equipment sales to 40% by 2027.
- Tokyo Electron aims for annual net sales of 3 trillion yen or more and an operating margin above 35% by FY2027.
Japanese chip equipment maker Tokyo Electron is poised to achieve a record operating profit of 1 trillion yen ($6.3 billion) for the fiscal year ending March 2027, a projected 60% increase from the prior period. This significant growth is attributed to robust demand for semiconductor manufacturing equipment, particularly for AI-related applications such as high-bandwidth memory (HBM) and advanced logic chips. Customer investment momentum has accelerated, according to CFO Hiroshi Kawamoto.
The company is strategically focusing on high-growth markets in South Korea, Taiwan, and the United States to counter declining revenue shares from China due to export restrictions. Tokyo Electron aims to increase the proportion of AI-related equipment within its total wafer fab equipment (WFE) sales to 40% by 2027, aligning with its medium-term plan to reach annual net sales exceeding 3 trillion yen and an operating margin above 35% by the same year.
In its first quarter (April-September 2026), Tokyo Electron reported record revenue of 732.3 billion yen and operating profit of 211.4 billion yen. The company also revised its first-half net profit forecast upward to 349 billion yen. Price optimization negotiations with customers are underway to address inflation and rising labor costs, with effects expected in the latter half of the fiscal year.
While acknowledging the growing strength of local Chinese competitors in certain areas like immersion deep ultraviolet (DUV) lithography equipment, Kawamoto expressed confidence in Tokyo Electron's advantage in more advanced equipment and customer trust compared to local manufacturers. The company forecasts the wafer front-end semiconductor manufacturing equipment market to expand to over $150 billion this fiscal year and over $190 billion in fiscal 2027, with AI data center demand expected to constitute 50% of the total market.