Tokyo Electron has raised its full-year performance forecast despite quarterly profits falling short of market expectations. The company stated that equipment procurement spending by chip manufacturers is set for significant growth, driven by the artificial intelligence investment boom.

The semiconductor equipment supplier now anticipates an operating profit of 593 billion yen (approximately $38 billion) for the fiscal year ending March 2026. This represents an increase from its previous forecast of 586 billion yen but still falls below market expectations.

Tokyo Electron indicated that demand for DRAM (Dynamic Random-Access Memory) manufacturing equipment is particularly strong, covering both high-bandwidth memory and traditional DRAM chip-related equipment. This trend is expected to continue for several years. Meanwhile, procurement momentum from memory chip manufacturers in China has cooled slightly, and domestic logic chip manufacturers have postponed equipment delivery plans.

Hiroshi Kawamoto, head of the company's finance department, stated at an earnings briefing on the 6th, "Customer inquiry demand is extremely robust. If customers' cleanroom capacity constraints and procurement bottlenecks can be resolved quickly, the company's performance this year could achieve growth exceeding 20%."

For the quarter ending December 2025, Tokyo Electron reported an operating profit of 116.14 billion yen, significantly lower than the average analyst expectation of 158.6 billion yen. Kawamoto attributed the quarter's sales performance as "slightly weaker" due to product shipment timing. Additionally, Tokyo Electron announced a share buyback plan of up to 150 billion yen.

From Amazon and Alphabet to Alibaba, global tech giants and sovereign wealth funds are investing hundreds of billions of dollars in data centers, chips, and other hardware to compete for leadership in the artificial intelligence field.

Tokyo Electron's clients include industry leaders such as Taiwan Semiconductor Manufacturing and Samsung Electronics. The company has benefited from growing demand for advanced chip manufacturing equipment. However, intensified US-China technology competition has forced the Japanese firm to navigate challenges posed by related export control measures.

Taiwan Semiconductor Manufacturing plans to utilize a 3-nanometer chip manufacturing process in its second new factory in Japan, from which Tokyo Electron is expected to benefit further.