Tokyo Electron raises profit forecast 87% to 1.17 trillion yen as AI demand shows no sign of slowing

Japanese chip equipment giant Tokyo Electron forecast on Friday, October 30, a stronger-than-expected 87% jump in operating profit to 1.17 trillion yen (about $7.41 billion), underscoring robust demand for chipmaking equipment. The company gave the outlook at a briefing on its half-year results.

CFO: no sign of a slowdown

Chief Financial Officer Hiroshi Kawamoto told reporters that conversations with customers showed interest was very strong, adding: "At present, there are no signs that this is slowing down." Tokyo Electron is a major supplier of equipment for processes such as deposition and etching to chipmakers around the world. The company also said it would spend up to 150 billion yen to buy back some 25 million shares, though its shares closed down 5% ahead of earnings.

Market jitters alongside strong supplier results

The forecast lands amid investor concern over whether massive AI infrastructure spending will generate adequate returns: Alphabet, Intel and Amazon all fell overnight, and the caution spread to Asia on Friday, pressuring technology stocks including South Korea's SK Hynix, Taiwan's TSMC and Japan's Advantest. Yet chip supply-chain companies keep reporting strong results: SK Hynix said this week it would return about $75 billion to shareholders as higher memory prices boost profits; Japanese memory chip maker Kioxia announced an interim dividend of 90 yen per share on Friday, with excess cash to be used for shareholder returns from the second half of the fiscal year; and China's CXMT swung to a net profit for the quarter on higher memory prices.

Industry voices pushed back against the AI-bubble narrative: Foxconn Chairman Young Liu told reporters at a company event that AI was not in a bubble and demand for AI products remained clear, while MediaTek CEO Rick Tsai said demand growth for AI would certainly continue, although the rate may vary. David Gibson of MST Financial said doubts over the Anthropic IPO, AI financing and wider AI adoption were holding investors back, and that it would take time to fix this week's selloff.

This report is compiled from verified sources and is not a verbatim translation of the originals.