Japan Chip Stocks Soar as Kokusai Electric Emerges as a New Semiconductor Star
Kioxia, Disco and Tokyo Electron continue their remarkable rallies, while Kokusai Electric jumps 22% as analysts forecast explosive earnings growth.
Japan’s semiconductor sector remains one of the hottest corners of the Tokyo market. DividendJapan.com has covered many of these stocks extensively over the past two years, and several of our most frequently discussed names continue to deliver extraordinary returns.
The biggest winner remains Kioxia Holdings, which closed Friday at ¥81,200. That is an astonishing move considering we first highlighted the stock around ¥3,500 last year. Despite the explosive share price performance, Kioxia still trades at an estimated P/E ratio below 9, making it one of the cheapest major semiconductor stocks globally. The company does not pay a dividend, but its market capitalization has now reached approximately $277 billion.
Key Points
Kioxia closes at ¥81,200, up dramatically from levels around ¥3,500 when DividendJapan first covered the stock
Disco gains another 18.4% this week, closing at ¥79,900
Tokyo Electron rises 15% in a week to a new all-time high near ¥68,000
Lasertec continues to recover strongly, closing at ¥44,000
Kokusai Electric jumps 22% and emerges as one of Japan’s newest semiconductor stars
AI-related investment continues to support growth expectations across the sector
A Remarkable Run for Japan’s Chip Stocks
Few sectors in Japan have generated as much excitement as semiconductors.
Disco Corp (TSE: 6146) remains one of the market’s biggest success stories that we highlighted last September when the stock traded at ¥40,000. The company manufactures precision dicing, grinding and polishing equipment used in semiconductor production. Shares closed Friday at ¥79,900, many times higher than when DividendJapan.com first covered the stock. Disco gained another 18.4% during the week alone. The company now carries a market capitalization of approximately $54 billion, trades at an estimated P/E ratio of 49, and offers a dividend yield of around 0.6%.
Another familiar name is Lasertec (TSE: 6920), the global leader in mask inspection systems used in advanced semiconductor manufacturing, particularly EUV technology. Shares closed Friday at approximately ¥44,000. We wrote about Lasertec last September with the stock trading at ¥20,000.
Lasertec currently trades at an estimated P/E ratio of 52, has a market capitalization of roughly $26 billion, and offers a dividend yield of around 0.8%.
Perhaps the most dramatic turnaround belongs to Tokyo Electron (TSE: 8035). We wrote about the company last year when shares traded near ¥20,000 during a difficult period for the stock. On Friday, Tokyo Electron closed near ¥68,000, marking a new all-time high after gaining another 15% this week. The company competes with major U.S. semiconductor equipment suppliers such as Lam Research, KLA Corporation, and Applied Materials. Tokyo Electron’s market capitalization now approaches $199 billion, with an estimated P/E ratio of 44 and a dividend yield of approximately 0.9%.
Kokusai Electric Emerges as a New Semiconductor Star
One stock that has received less attention on DividendJapan.com so far is Kokusai Electric (TSE: 6525).
Kokusai develops semiconductor manufacturing equipment used primarily in deposition processes, a critical step in advanced chip production. Its competitors include global equipment suppliers such as Applied Materials, Lam Research, and Tokyo Electron.
The company only returned to the stock market recently, completing its IPO on October 25, 2023. Like Kioxia, Kokusai is still relatively new to public investors.
Shares surged more than 22% on Friday, closing at ¥8,875. The stock is now up 61% in 2026, following a gain of approximately 100% in 2025. For a long time Kokusai lagged many of its peers, but investors have clearly become much more enthusiastic in recent months.
The company’s market capitalization now stands at approximately ¥2.12 trillion, equivalent to roughly $13 billion.
Dividend Remains a Weak Spot
One aspect that stands out is the dividend.
Unlike Kioxia, which pays no dividend at all, Kokusai does return cash to shareholders. However, the company kept its dividend unchanged at ¥37 per share for fiscal 2025/2026. That means the payout has now remained flat for two consecutive years.
Given the strong share price performance and favorable industry backdrop, the lack of dividend growth is noteworthy. At the current share price, the dividend yield is only about 0.4%, which is extremely low by Japanese standards.
Growth Expectations Drive Investor Enthusiasm
The reason investors remain excited is simple: growth expectations.
Revenue for fiscal 2026, which ended in March, declined 1.6% to ¥235 billion. However, analysts expect a sharp rebound. Consensus estimates currently forecast revenue growth of 28.2% in fiscal 2027, lifting sales to a record level above ¥300 billion.
Growth is expected to continue beyond that, with analysts projecting further double-digit increases in subsequent years.
Profit growth is even more impressive. Analysts expect earnings per share to rise by more than 56% to ¥201 per share in fiscal 2027. By fiscal 2028, EPS is expected to reach approximately ¥271, representing another year of growth approaching 35%.
The company also maintains a debt-free balance sheet, adding to its appeal.
Valuation and Analyst Views
Kokusai currently trades at an estimated P/E ratio of 44 based on fiscal 2027 earnings projections. That may appear expensive at first glance, but earnings are growing rapidly.
In addition, many of Kokusai’s much larger U.S. peers trade at even higher valuations while offering similar dividend yields.
Analysts remain broadly positive:
3 Strong Buy
8 Buy
1 Sell
With AI-related investment continuing to accelerate globally and growth forecasts rising sharply, Kokusai has quickly become one of the semiconductor stocks we are watching most closely.
At DividendJapan, we aim to highlight these opportunities and uncover hidden gems that may not yet be on your radar. Stay tuned as we explore Japan’s dividend growth stories and the next generation of market leaders!
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.