Kioxia's 'supercycle' declaration propels SCREEN Holdings (7735)
A declaration by a Kioxia executive on June 2 that the semiconductor market had entered a "supercycle" propelled shares of SCREEN Holdings Co. up 4.2% on Wednesday. The Japanese semiconductor equipment manufacturer's stock is trading at ¥12,980, an increase of ¥525 from its previous close of ¥12,455.
The executive's statement boosted expectations for SCREEN Holdings, as increased demand for artificial intelligence and NAND memory directly affects its key customers. This aligns with the ongoing uptrend in the semiconductor industry, driven by substantial AI-related investments and robust demand from major foundries. The company previously recorded its highest-ever order intake in the fourth quarter of the last fiscal year, with this momentum anticipated to continue through the current and next fiscal periods.
SCREEN Holdings, a key producer of semiconductor manufacturing equipment, has consistently attracted market attention. Its stock had been rising previously, buoyed by strong earnings expectations and the growing demand for AI semiconductors. The company continues to benefit from the overall robust demand within the semiconductor sector.
Why a "Supercycle" Declaration Boosted SCREEN Holdings
SCREEN Holdings manufactures the highly specialised equipment essential for producing semiconductors. Their customers are the world's leading chipmakers, who rely on this machinery to create advanced components for everything from artificial intelligence to NAND flash memory. Essentially, SCREEN Holdings makes money by enabling these major players to expand their production and improve their technology, with their fortunes closely tied to the broader semiconductor industry's health and investment cycles.
The primary catalyst for today's share price jump was a declaration from an executive at Kioxia on 2 June, suggesting the semiconductor market has entered a "supercycle." This term implies a prolonged period of robust growth, driven by increasing investment in AI and surging demand for NAND flash memory. Such an outlook directly encourages SCREEN Holdings' key customers to boost their capital expenditure, thereby increasing orders for the company's manufacturing equipment. This positive sentiment builds on SCREEN Holdings' already strong performance, having reported record orders in the fourth quarter of the previous fiscal year.
Reflecting this optimistic industry forecast, SCREEN Holdings' stock is currently trading at ¥12,980, marking a 4.2% increase from yesterday's close of ¥12,455.
Consider a company that supplies advanced tools to a booming industry, like a specialist supplier of high-tech mining equipment. If a major geological survey announces the discovery of vast, easily accessible new mineral deposits, it signals a long-term surge in mining activity. This declaration, much like the semiconductor "supercycle," would immediately translate into expectations of significantly increased demand for that equipment supplier's products, even before the new mines are fully operational.
SCREEN Holdings
SCREEN Holdings Co., Ltd. (7735) is a Japanese technology firm specialising in semiconductor manufacturing equipment. Its extensive product portfolio includes coat/develop trackers, wafer cleaning systems, annealing systems, and advanced packaging lithography equipment. Beyond semiconductors, SCREEN Holdings offers a diverse range of solutions, from direct imaging and automatic optical inspection systems to high-speed inkjet and digital printing technologies for various applications including offset printing and digital books. The company also develops artificial intelligence, text mining, and augmented reality solutions, alongside biosciences equipment and components for in-vehicle inspection. Additionally, it provides contract manufacturing and intellectual property services, and produces lithium-ion rechargeable batteries. Formerly known as Dainippon Screen Mfg. Co., Ltd., the company was established in 1943 and is headquartered in Kyoto, Japan.