Screen Holdings
Capital-equipment OEM: designs, manufactures, sells and services semiconductor production equipment (SPE), plus smaller display/PCB, graphic-arts, and printed-electronics units; recurring parts-and-service tail on a large installed base (cumulative >15,000 cleaning tools shipped, company figure).
Earnings, margins, COGS & capex
FY2025 (ended Mar-2026) was a mild down year off a record base: revenue ¥605.7B (-3.1%, below the ¥621B guide) and operating profit ¥122.5B (-9.7%) at a record 20.2% margin (above the 18.8% guide), net profit ¥92.0B. The SPE segment (~80% of sales) did ¥485.9B at ~25.2% operating margin; the Filter (OLED) unit spiked +224.9%. Management guides FY2026 sharply higher - ¥725B revenue (+19.7%), ¥150B operating profit, SPE ¥600B (+23.5%) at 25.5% margin - on AI/HBM-driven cleaning-tool demand and record Q4 orders. SCREEN holds ~45% global share in single-wafer cleaning.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~63¢ is cost of goods and ~17¢ operating expense, leaving ~20¢ of operating profit (~15¢ net).
Revenue trend
Margins
guided 20.7% FY2026
guided 25.5% FY2026 (best-in-class for the category)
guided ¥110B FY2026 (~15.2%)
stable
COGS structure
Dominated by precision mechanical/fluidics assemblies, robotics, quartz/chemistry-handling subsystems, and outsourced electronic subsystems for cleaning and coater/developer tools; SPE mix and yen/USD translation are the main margin swing factors. High-margin parts-and-service revenue on the installed base cushions the equipment cycle.
Capex
FY2026 capex guided at a record ¥43B (~5-7% of sales) to add capacity for FY2027+; management says current capacity already covers FY2026 demand. R&D also a record ¥43B, concentrated in SPE cleaning/surface-prep nodes.
Latest earnings
Beat own margin guide - 20.2% operating margin vs 18.8% January forecast (operating profit ¥122.5B vs ¥117B guide) though revenue missed (¥605.7B vs ¥621B guide); SPE Q4 orders hit record high
FY2026 (ending Mar-2027): revenue ¥725B (+19.7%), operating profit ¥150B (+22.4%), net profit ¥110B; SPE ¥600B at 25.5% margin. Record R&D and capex of ¥43B each; dividend raised to a record ¥175/share post-split.
- FY2025 revenue
- ¥605.7B (-3.1%)
- FY2025 operating profit / margin
- ¥122.5B / 20.2%
- FY2025 net profit
- ¥92.0B
- SPE FY2025 revenue / margin
- ¥485.9B / ~25.2%
- Operating cash flow
- ¥92.7B (up from ¥71.2B)
- China % of revenue
- 38% (down from 42%)
Growth drivers
- AI/HBM capex supercycle — management cites 'surging' generative-AI-driven inquiries and HBM order acceleration into H2
- Leadership in single-wafer cleaning as more clean steps are added per advanced node (2nm/GAA, advanced packaging)
- Taiwan (TSMC-region) expansion, with China + Taiwan holding ~60% of sales as the China mix softens
- Record Q4 SPE orders converting to FY2026 revenue
- Installed-base service/parts tail (>15,000 cumulative cleaning tools) as a recurring margin anchor
- OLED/filter unit riding a display-capex up-cycle (small but fast-growing)
Bull & bear
A focused category leader in single-wafer cleaning (~45% share) - a rising-intensity step in every advanced node - compounding at a ~25% SPE margin with a net-cash balance sheet, guiding ~20% FY2026 revenue growth on AI/HBM demand. After a ~60% 52-week rally it trades ~31x forward earnings, cheaper than Lam's elevated multiple though no longer the clear discount to US peers it once was.
- Cleaning is a secular share-gainer: more clean steps per wafer at 2nm/GAA and in HBM/advanced packaging structurally grows SCREEN's core
- Record Q4 SPE orders + explicit HBM order acceleration underpin the +23.5% SPE guide
- Best-in-class ~25% SPE operating margin with a record 20.2% consolidated margin - beat its own margin forecast
- Net-cash, record R&D/capex funded internally; dividend raised to a record ¥175/share
- On the ¥110B+ FY2026 net guide the ~31x forward multiple can be carried by earnings growth even without further re-rating - and it still sits below Lam's spiked trailing multiple
- China de-risking underway - Taiwan expansion offsetting the softer China mix (China + Taiwan ~60% of sales)
A single-product, highly cyclical equipment name with ~80% SPE concentration and 38% China revenue into a tightening export-control regime; the sharp FY2026 guide is order-book- and AI-capex-dependent and reverses a down FY2025 that actually missed its own revenue guide. After a ~60% run the stock is no longer cheap (~31x forward), leaving room for both estimate cuts and multiple compression if the WFE cycle or HBM build slips.
- FY2025 was a down year (-3.1% revenue, -9.7% operating profit) and revenue missed the ¥621B guide; the +19.7% snap-back is guidance, not banked
- After a ~60% 52-week re-rating, valuation is full at ~37x trailing / ~31x forward - a double hit (falling estimates + multiple compression) if the guide slips
- 38% China revenue with 10-15% of China investment flagged as exposed to US restrictions
- Narrow moat vs Tokyo Electron / Lam / Applied, which can bundle cleaning into full-flow platforms
- ACM Research undercutting on price in China cleaning share; SCREEN itself flagged some POR share loss to recover in the next cycle
- Extreme WFE cyclicality plus yen translation risk and thin OTC ADR liquidity for USD holders
What it is worth
Peer-relative (P/E vs US WFE peers) plus a reverse-DCF sanity check on the FY2026 guide. At ~¥3.38T market cap (~$22.8B; ¥17,860 x ~189M shares, Jul-6-2026) on ¥92.0B FY2025 net income, SCREEN trades ~37x trailing P/E, falling to ~31x on the ¥110B FY2026 net guide. Third-party aggregator P/E figures (9-16x) appear to mishandle the Apr-2026 2-for-1 split and are inconsistent with the hard market-cap/earnings math (net income cannot exceed the ¥122.5B operating profit).
WFE cycle rolls over and/or China restrictions bite harder than 10-15%; FY2026 growth undershoots, margins slip below 20%, and the ~31x forward multiple de-rates toward the low-20s on falling estimates - a double hit after the ~60% run-up.
FY2026 guide broadly delivered (~¥725B revenue, ¥110B net); stock tracks earnings at a ~28-32x forward multiple, holding roughly in line with US peers.
WFE supercycle + HBM sustains 20%+ revenue growth and holds the SPE margin at 25%+; EPS compounds into a ¥110B+ and rising base, so the stock climbs with earnings and the ~31x forward multiple is carried even without further re-rating - meaningful upside.
After a ~60% 52-week re-rating on the AI/HBM order surge, SCREEN is no longer the clear discount to US peers the prior draft assumed: ~31x forward is broadly in line with the US WFE group - cheaper than Lam Research's elevated trailing multiple (~70x, a cyclical-earnings distortion) but richer than Applied Materials. The price now embeds delivery of the FY2026 guide (mid-teens+ growth at a sustained ~20%+ margin); downside if AI/HBM capex or China (38% of sales) deteriorates faster than the flagged 10-15%. Not financial advice.
SWOT
Strengths
- #1 global share in single-wafer cleaning equipment (~45%) — a category that grows as node counts add clean steps
- Best-in-class SPE operating margin (~25%) and record 20%+ consolidated margin
- Large installed base (>15,000 cleaning tools) driving recurring service/parts revenue
- Net-cash balance sheet funding record R&D and capex through the cycle
- Deep co-development ties with leading-edge foundries/memory makers
Weaknesses
- Narrow product focus vs diversified peers — concentrated in cleaning/surface-prep, less coverage of deposition/etch/litho
- ~80% revenue concentration in the cyclical SPE segment
- 38% of revenue from China - exposed to US export-control tightening
- Yen translation and Japan cost base add earnings volatility for USD holders
- Thin US listing (OTC ADR) limits US-investor access and liquidity
Opportunities
- AI/HBM and advanced-packaging capex expanding the cleaning TAM
- 2nm/GAA transition multiplying wet-clean steps per wafer
- Taiwan and US fab buildouts (TSMC, Micron, Samsung, Intel) diversifying away from China
- OLED/display-equipment up-cycle via the fast-growing filter unit
- Service-revenue expansion on a growing installed base
Threats
- WFE-cycle downturns compress equipment orders sharply
- US-China export restrictions could impair the estimated 10-15% of China investment exposed
- Competition from Tokyo Electron and Lam bundling cleaning into integrated platforms
- ACM Research's low-cost China-focused encroachment on cleaning share
- Customer concentration among a handful of leading-edge fabs
Moats, dependencies & bottlenecks
Moats
~45% global share; process know-how qualified into leading-edge fab flows is hard to displace mid-node.
Moderate-Strong >15,000 cumulative cleaning tools generate recurring, higher-margin service revenue.
Tools qualified per process node create switching friction until the next node.
Record ¥43B R&D concentrated in cleaning keeps a technology edge but is narrower than diversified peers.
Dependencies
Samsung, SK Hynix, Micron, Intel, SMIC) Demand / customer Orders track a handful of fabs' capex decisions; concentrated and cyclical.
Geographic revenue 38% of revenue; 10-15% of China investment flagged exposed to US export controls.
Structural demand The FY2026 guide leans heavily on HBM order acceleration.
Precision components and process chemicals gate build rates.
Japan cost base + export sales make earnings sensitive to yen translation.
Advantages
- World's #1 in single-wafer cleaning (~45% share) - the highest-intensity-growth wet-process step
- ~25% SPE operating margin, top of the cleaning peer set
- Net-cash balance sheet self-funding record R&D and capex
- Large recurring service tail on a >15,000-tool installed base
- Direct leverage to AI/HBM and 2nm/GAA clean-step multiplication
Weaknesses
- Single-category concentration (~80% SPE) with high cyclicality
- 38% China exposure into a tightening control regime
- Less full-flow platform coverage than TEL/Lam/Applied
- Full valuation after a ~60% run; thin US ADR liquidity and JPY translation risk for USD investors
Bottlenecks
- Manufacturing capacity - capacity covers FY2026 but FY2027+ needs the record capex build
- Qualification cycle length - new tools must be requalified at each customer/node
- Subsystem/component lead times in an up-cycle
- Export-control compliance limiting addressable China demand
Top signals & trends
Top signals
Record Q4 FY2025 orders; the leading indicator for the FY2026 guide.
Directly drives cleaning-tool demand; management expects H2 acceleration.
Could impair the 10-15% China investment SCREEN already flagged as exposed.
Weak yen flatters reported sales/margin but adds USD-holder volatility.
Leading-edge capex sets the SPE order ceiling.
Trends
Expands cleaning TAM; core to the +19.7% FY2026 guide.
More wet-clean steps per wafer - structural share tailwind for cleaning specialists.
Shrinks the China SAM; SCREEN pivoting toward Taiwan/US.
New greenfield fabs are fresh equipment demand outside China.
TEL/Lam/Applied integrating cleaning into full-flow platforms pressures standalone specialists.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
Filtration, fluid-handling and advanced materials used in wet-process tools.
Flow/pressure control, RF and subsystem components for fab equipment.
Precision power and control subsystems for process tools.
Linear-motion and precision robotics components for tool build; Japan-listed (SMC, 6273.T, supplies pneumatics/fluidics).
Leading-edge foundry; primary cleaning-tool demand driver, Taiwan expansion focus.
Foundry + memory/HBM; major SPE customer.
HBM leader; key driver of the FY2026 HBM order acceleration; KRX-listed.
DRAM/HBM capex, US and Japan fabs.
Foundry buildout demand for leading-edge tools.
Largest China foundry; part of the 38% China revenue exposed to export controls (context, not a buy call); HKEX/STAR-listed.
Largest Japanese WFE OEM; coater/developer + cleaning; can bundle cleaning into full track/flow.
Etch/deposition leader also strong in cleaning and bevel-etch with scale service contracts.
Broadest WFE platform; adjacent surface-prep and integrated-flow leverage.
US-listed, China-centric cleaning specialist undercutting on price in SCREEN's core category.
Process-control adjacency rather than direct cleaning competitor; ecosystem overlap.
Captive Korean cleaning/track supplier to Samsung; not independently listed.