Bernstein is bullish on Japanese semiconductor stocks by Investing.com

Investing.com– Bernstein initiated coverage on Japanese semiconductor stocks with a positive view on the sector, expecting it to benefit from global chip demand growth and the artificial intelligence industry.

The brokerage said that after a sharp correction from July’s peak, semiconductor valuations were now much more attractive, particularly in the semiconductor manufacturing equipment (SPE) sector.

Bernstein said Japan’s semiconductor manufacturing equipment (SPE) sector is strong, especially amid a rush by major world governments to build local manufacturing capacity.

Top picks in this sector include Disco (OTC:) Corp (TYO:), Advantest Corp. (TYO:) and Tokyo Electron Ltd. (TYO:)- all three that Bernstein rated as Outperformed.

Bernstein rated Screen Holdings (TYO:) and Kokusai Electric Corp (TYO:) as market performance and rated Lasertec Corp (TYO:) as Underperform.

The brokerage was most bullish on Japanese SPEs, saying growth in the sector could grow faster than the global average for AI demand.

On Japan chip materials and the analog sector, Berenstein maintained a neutral stance, with materials poised to face headwinds from competition and overcapacity. Brokerage rated Hoya Cor (TYO:) as Outperform, SUMCO Corp. (TYO:) as Market Perform and Ibiden Co Ltd (TYO:) as Underperform in the materials sector.

In the analog sector, Bernstein forecast short-term weakness due to high inventories, but saw strong long-term growth in the sector, particularly from the AI ​​industry.

Brokerage rated Renesas Electronics Corp (TYO:) as Outperform, citing its exposure to AI servers.