In this republished article, top analysts discuss the five concerns facing the semiconductor industry and the likely winners in AI semiconductors as part of their five-year outlook.
Results for the first quarter of the fiscal year ending March 2027 have been released across the semiconductor industry, with strong earnings standing out. ADVANTEST raised its full-year earnings forecast, while Kioxia Holdings announced a first-half net income forecast of ¥2.1121 trillion. At the same time, share prices have continued to decline from their highs, indicating that the industry has not yet fully recovered.
Kazuyoshi Saito (斎藤和嘉), senior analyst at Iwai Cosmo Securities, said the semiconductor industry is benefiting from strong tailwinds and is likely to continue growing over the medium to long term. He believes there is a high probability of linear growth through around 2030 and said large-scale investment in South Korea would also provide support.
Yasuo Imanaka (今中能夫), chief analyst at the Rakuten Securities Economic Research Institute, pointed to the ongoing shift from generative AI to AI agents and rising demand for automation in data centers. He explained that AI agents involve multiple inference processes, potentially driving demand for DRAM, NAND and SSDs.
The semiconductor ecosystem is broad, and adjacent fields such as memory, semiconductor manufacturing equipment, electronic components, power supplies and optoelectronic semiconductors are also considered promising as demand for data center equipment expands. However, uncertainties remain, including the direction of memory prices and the sustainability of Japanese companies’ technological advantage.