Tokyo Electron Ltd. Sees Sharp Rise in Shares as Capital Expenditures for Chip-Making Equipment Recover
Tokyo, Japan – Tokyo Electron Ltd. saw a significant increase in its shares after it raised its fiscal-year earnings forecasts, citing a recovery in capital expenditures for chip-making equipment. The company’s shares were up 10% at 32,830 yen in Tuesday morning trade, after reaching a peak of 12% earlier. The rise in Tokyo Electron’s shares comes after the Japanese markets were closed on Monday for a holiday.
According to Tokyo Electron, capital investment in semiconductor-production equipment has shown signs of bottoming out, with inquiries about equipment for generative artificial-intelligence applications on the rise. Additionally, capital investment in China has remained strong as the country aims to enhance its self-sufficiency in chip production, especially for applications such as the Internet of Things, automotive, and industrial sectors.
As a leading manufacturer of semiconductor production equipment, Tokyo Electron now expects a net profit of Y340.00 billion ($2.28 billion) for the fiscal year ending in March, surpassing its previous projection of Y307.00 billion. Furthermore, the company anticipates fiscal-year revenue to reach Y1.830 trillion, which is higher than its previous estimate of Y1.730 trillion.
This positive outlook reflects Tokyo Electron’s confidence in the recovery of capital expenditures for chip-making equipment. With increased inquiries for advanced equipment and the strong demand for chips in various industries, Tokyo Electron is well-positioned to leverage these opportunities and drive its growth in the market.
Investors and industry analysts are closely monitoring Tokyo Electron’s performance due to its integral role in the semiconductor production sector. The company’s success in capitalizing on the recovery in capital expenditures will not only fuel its own growth but also provide valuable insights into the broader outlook for the chip-making industry.
Disclaimer: This article is not financial advice. Investors should conduct their own research and analysis before making any investment decisions.
Analyst comment
Positive news: Tokyo Electron Ltd. experiences a sharp rise in shares due to a recovery in capital expenditures for chip-making equipment. The company raises earnings forecasts and expects higher revenue, reflecting its confidence in the industry’s recovery. Analysts predict that Tokyo Electron will leverage the increased inquiries and strong demand for chips to drive its growth in the market.
