Tokyo Electron Limited
8035・Prime Market・Electric Appliances
Business
Tokyo Electron Limited, founded in 1963, is a manufacturer specializing in semiconductor production equipment, offering a broad product lineup including coaters/developers, etching systems, deposition systems, cleaning systems, process equipment for advanced packaging, and wafer probers. The corporate group consists of the Company and 27 affiliated companies, operating under a structure in which the Company purchases products manufactured by its domestic manufacturing subsidiaries and sells them. Overseas sales account for 90.2% of net sales, with customers including major global semiconductor manufacturers such as Samsung Electronics and TSMC. With a cumulative shipment total of over 100,000 units and more than 26,000 patents held, the Company provides high-value-added products and services in both the semiconductor scaling (miniaturization) and advanced packaging fields.
Business Model
The main revenue source is sales of Semiconductor Production Equipment, and sales fluctuate in line with customers' capital expenditure cycles. In addition, the company has a structure in which aftermarket revenue—such as upgrades and maintenance parts/services for previously delivered equipment—accumulates steadily. In FY2026 (ending March 2026), the gross profit margin remained at a high level of 45.3%, and the operating profit margin at 25.6%. By continuing to invest ¥277,866 million (11.4% of net sales) in research and development, the company is maintaining and strengthening the competitiveness of its products for next-generation process requirements.
Company Strengths
The company has an industry-leading track record with cumulative shipments of over 100,000 units and a patent portfolio of over 26,000 patents. It offers a wide range of products from coaters/developers to etching, deposition, cleaning, and advanced packaging process equipment, and its product lineup covering both semiconductor scaling and advanced packaging forms an entry barrier that is difficult for competitors to replicate in a short period of time.
R&D expenses for FY2026 (ending March 2026) were ¥277,866 million (11.4% of net sales), up 11.1% year on year, continuing to expand. The company has formulated an R&D investment plan of over ¥1.5 trillion over five years cumulatively, and is advancing leading-edge technology development in areas such as EUV resist material technology, multi-patterning, and process integration. It is also actively pursuing joint development with leading universities and research institutions both in Japan and overseas, building a technological foundation to support next-generation devices.
In FY2026 (ending March 2026), the equity ratio was 71.5%, ROE was 29.6%, and free cash flow reached a record high of ¥433,248 million. Using cash flow from operating activities of ¥539,732 million as a source of funds, the company is achieving both growth investment and shareholder returns. Its financial structure, which is nearly debt-free, combined with ample cash on hand (cash and cash equivalents of ¥505,414 million), supports a management foundation that enables continued proactive investment even amid economic fluctuations.
ENVALITH's Perspective
Performance Trend
Revenue was ¥2,443,533 million (up 0.5% year on year), a modest increase. Operating profit was ¥624,936 million (down 10.4% year on year), and the operating margin was 25.6% (down 3.1 points year on year), reflecting deteriorating profitability. The main causes were an increase in cost of sales (up 3.9% year on year) and an increase in selling, general and administrative expenses (up 7.6% year on year). Meanwhile, the recording of a gain on sale of investment securities of ¥115,494 million as extraordinary income supported profit growth, with profit attributable to owners of parent reaching ¥574,454 million (up 5.6% year on year). As an external factor, a pause in capital investment directed at China constrained revenue growth, while expanding investment in semiconductors for generative AI provided support. For the interim period of FY2027 (ending March 2027), the company forecasts revenue of ¥1,570,000 million (up 33.1% year on year) and operating profit of ¥431,000 million (up 42.2% year on year), pointing to an expected sharp recovery in performance.
Growth Strategy
Pursuing medium- to long-term growth against a backdrop of AI, the data-driven society, and decarbonization, with a sharp rebound expected in the interim-period forecast
Against a backdrop of expanding demand for AI servers used in data centers, capital investment in semiconductors for AI applications such as HBM and advanced logic has grown notably. The forecast for net sales of ¥1,570,000 million for the first half of FY2027 (ending March 2027), up 33.1% year on year, reflects this captured demand, with the Company's core product lineup demonstrating strong capability to address advanced processes.
R&D expenses for FY2026 (ended March 2026) totaled ¥277,866 million (11.4% of net sales), an increase of ¥27,849 million year on year. The Company is accelerating the development of products compatible with next-generation semiconductor processes such as GAA and EUV back-end processes, aiming for continued participation in customers' advanced investment cycles.
Expenditures for the acquisition of property, plant and equipment in FY2026 (ended March 2026) amounted to ¥208,984 million, an increase of ¥50,610 million year on year. Buildings and structures expanded to ¥468,429 million, up ¥167,547 million year on year, as the Company actively promotes the development of production and R&D facilities.
Under a performance-linked dividend policy targeting a payout ratio of 50.1%, the annual dividend for FY2026 (ended March 2026) was ¥628 per share (up ¥36 year on year), with total dividends of ¥287,405 million. Combined with share buybacks of ¥150,010 million, total shareholder returns amounted to ¥421,628 million. The interim dividend for FY2027 (ending March 2027) is planned at ¥361 per share.
Last updated: July 19, 2026