Bernstein has singled out three Japanese makers of semiconductor production equipment as its preferred names in the sector, attributing recent swings in China market shares primarily to shifts in customer investment schedules and order composition rather than to a broad-based decline in competitiveness.
The research note examines each company through the lens of Chinese customer behaviour and local competitive pressure, concluding that timing and customer mix dominated the 2024-2025 market outcomes.
Tokyo Electron
Bernstein assigns Tokyo Electron an Outperform rating with a price target of 59,200 yen. The firm says the company's share loss in China during 2025 stemmed mainly from customer mix effects and differences in investment timing. In particular, reduced orders from key customer CXMT last year played a substantial role. Bernstein also pointed out that Tokyo Electron historically priced its equipment less aggressively than some peers, a stance that became consequential as the yen weakened and put pressure on market share. Looking ahead, the broker notes Tokyo Electron is increasingly explicit about pricing in China, highlighting that some tools remain difficult for local suppliers to replace and that the company is introducing surcharges to offset cost increases and to cover expedited delivery.
Kokusai Electric
Kokusai Electric receives an Outperform rating from Bernstein with a 8,240 yen price target. The note attributes the firm's 2024-2025 China share decline largely to CXMT's investment cycle, with CXMT-related revenue estimated to drop from roughly 47 billion yen in 2024 to about 11 billion yen in 2025. Bernstein argues that local competitors have not yet matched Kokusai's capabilities in its core thermal process areas, making the headline China import data for 2025 a poor indicator for longer-term investment merit. The broker expects demand to be supported by a memory capacity expansion cycle, while near-term upside or downside is viewed as more a function of capacity constraints than of intensified competition.
Screen Holdings
Screen Holdings is rated Market-Perform by Bernstein with a price target of 12,600 yen. The broker traces Screen's China market share decline in 2025 to order timing and efforts by Chinese customers to localize equipment supply. CXMT, in particular, placed no meaningful orders over the last two years as it pursued a domestic equipment base. Screen also faced reduced demand when Swaysure, a major customer in China’s DRAM segment, halted investment in 2025. Despite these setbacks, Bernstein said it has grown more constructive on Screen following a company call, citing expectations for a return of CXMT orders, a sizeable new order from JHICC, and an uptick in purchases from YMTC - roughly 1.5 times what YMTC bought the prior year.
Across the three firms, Bernstein’s central theme is that short-term China market share movements largely reflect where customers are in their investment cycles and how order timing unfolded, rather than a systemic loss of competitiveness among Japanese equipment suppliers. The broker highlights customer-specific developments and capacity considerations as primary determinants of near-term performance.
Investors following the Japanese semiconductor equipment space should weigh these customer-driven dynamics and capacity constraints when assessing prospects for revenue recovery and market-share reallocation.
Key takeaways
- Bernstein sees recent China share losses for Japanese equipment makers as the result of timing and customer mix, not structural competitive decline.
- Tokyo Electron and Kokusai Electric were rated Outperform; Screen Holdings was rated Market-Perform.
- Memory capacity expansion and capacity constraints are central near-term demand drivers.