Top Japanese Chip Stocks to Watch Going Into Q3 Earnings, According to Bernstein

 Bernstein outlined its top picks among Japanese semiconductor stocks going into the September-quarter earnings season, with positioning calls ranging from strong buys to market-perform ratings based on quarterly earnings expectations and guidance outlooks.

Bernstein noted that while recent earnings from TSMC and ASML pointed to continued strength in artificial intelligence-driven demand, market reactions may not be as positive as investors are hoping. 

Advantest

Bernstein is positioning long into the print. The key profit item is full-year operating profit guidance, which it expects to be raised to ¥900bn, though that is not a firmly held consensus view. Revenue signals are mixed: industry billings data points to a beat and import data to a miss. The analysts lean toward a beat, with lower conviction given the short data history. ASIC expectations are already built in, so commentary on CPU and CPO testing and further share gains is the likely share-price driver. EPS is forecast to rise from ¥513 to ¥949.

Kokusai

Kokusai is the second long call alongside Advantest. Bernstein says the company is tracking well against consensus and is likely to raise guidance on strong orders from both China and non-China memory customers. The note gives no specific operating profit figure for the raise, so the profit read-through is directional. Most of the year's upside was baked in when the company significantly revised guidance last quarter, so another raise would be a positive surprise. Commentary on pricing negotiations and capacity expansion is the other focus. EPS estimates climb from ¥129 to ¥262 and then ¥374.

Screen

Screen faces the biggest expected miss of the group. Bernstein's data-driven work points to a clear shortfall against consensus in the semiconductor equipment segment, and even allowing for delayed China DRAM revenue recognition it would still imply downside to earnings. Conviction is somewhat lower than for TEL and Advantest because only two regions of data are available and revenue is booked on installation rather than shipment. Management commentary on pricing, and how much margin upside appears in the second half and next year, is what could help.

Tokyo Electron

Tokyo Electron is tracking behind consensus on both industry billings and import data, but Bernstein says the real event is guidance. Expectations are for full-year operating profit of about ¥1tn, which the company could beat, with pricing upside feeding into the fourth quarter and a stronger second half. The pricing and margin message is largely communicated and expected already. Watch whether its supply chain can support growth and whether the 2027 equipment outlook is raised. 

Lasertec

Lasertec is expected to raise its order guidance this quarter rather than waiting for its usual second-quarter cadence, as management gains visibility on adoption of its ACTIS A200 HiT product. Bernstein cautions that investor expectations for the new range are already high and risky, so the bar is steep. With quarterly orders no longer disclosed, the analysts rely on production, which looks strong, as the leading indicator.

DISCO

DISCO is among the names that would benefit more on operating profit from a weaker yen, though FX was neutral in the quarter and the yen has strengthened slightly so far in the fourth quarter. Bernstein keeps an Outperform rating, although the shares are among the weaker performers this quarter.

Hoya

Hoya is Bernstein's preferred non-equipment name this quarter. The note expects solid results and guidance pointing to acceleration in mask blanks and HDD substrates, with continued margin strength and a sequential recovery in life care operating margin toward 20%. Toshiba's move to glass substrates widens Hoya's addressable HDD market, and strong end demand could force upward revisions to HDD and EUV forecasts and further capacity expansion. Bernstein cautions that revisions will be less dramatic because there is little volume or price uplift. 

Renesas

Bernstein's own third-quarter forecast sits above its regression, which points to a revenue miss versus consensus. The analysts discount the regression because it rests on just two months of volatile data, and they expect a modest beat instead. Attention turns to the fourth quarter, where they expect guidance for sequential growth and stable margins, supported by price hikes, AI server demand and auto and industrial restocking. The risk is a lack of clarity on pricing and its margin impact, with December price negotiations the next catalyst. 

Sumco

Bernstein is Market-Perform on Sumco and sees little to drive near-term profit upside. Third-quarter revenue is expected to land modestly below consensus, and the fourth quarter will decline because Formosa Sumco is deconsolidated after the stake sale. Long-term contract renewals and price negotiations have not happened, leaving no near-term catalyst, though investors will listen for comments on inventory declines and spot prices. 

Ibiden

Ibiden is expected to report electronics results essentially in line with consensus, so the catalyst is outlook and capacity. Bernstein thinks current-year guidance won't necessarily be raised, but next year's looks too low and will likely be lifted. The company is also expected to announce two new fab cells for expansion beyond 2029, which should lead to a higher FY2030 operating profit forecast. Price-hike comments would help, though the new capacity is arguably already in the share price.