Tokyo Electron Forecasts Profit Surge Amid AI Market Caution

Tokyo Electron forecast an 87% increase in operating profit to 1.17 trillion yen, attributing the growth to strong demand for semiconductor equipment. Despite the positive outlook, the company's shares fell 5% as investors questioned whether massive capital expenditures in AI infrastructure would yield sufficient returns.

To stabilize its stock price, the company announced plans to spend up to 150 billion yen to buy back approximately 25 million shares. The market caution extended to other technology firms, including TSMC, SK Hynix, and Advantest, as well as U.S. companies such as Alphabet, Intel, and Amazon.

Industry leaders have pushed back against the notion of an AI bubble. Foxconn Chairman Young Liu and MediaTek CEO Rick Tsai both maintained that demand for AI remains strong. Tokyo Electron CFO Hiroshi Kawamoto noted that customer interest in equipment is very strong and there are currently no signs of a slowdown.