On Clients' Minds - Japan

Research evidence excerpt

On Clients' Minds - Japan

Japan Insights

Equity Research

June 12, 2026

Japan Tech SEMI announced the World Fab Forecast for 2Q 2026 on June 3. It expects the SPE

front-end process equipment market to be worth US$152.2bn in 2026 (+23.5% YoY), an increase

from the previous US$143.0bn (+16.5%) estimate (March). It lifted its 2027 forecast as well from

US$159.3bn (+11.4%) to US$166.0bn (+9.0%).

The Japan Steel Works Nikkei on June 5 reported that the government has set a target to rebuild

up to 5 nuclear power plants by the 2040s. At a subcommittee of the Advisory Committee for

Natural Resources and Energy to be held today, METI (Ministry of Economy, Trade and Industry)

will present a revised draft of nuclear policy action guidelines. If approved, it will go through public

comment and is scheduled for formal decision at a cabinet-level meeting as early as summer

2026.

Highlights from Asia:

Franchise Report: Asia-Pacific excl. Japan Internet In this report, we highlight key catalysts across

sub-sectors in 2H amid undemanding valuation of the internet sector. As highlighted in our report

(link), investors are assessing the sector from perspectives beyond earnings revisions. We analyze

sub-sectors from a bottom-up approach and review AI progress at company level across the board.

Our 10 Q&A section addresses key investors' questions. We reaffirm Alibaba/Tencent as our sector

top picks in 2026.

India Pharmaceuticals WuXi AppTec’s addition to US DoD’s 1260H list triggers Biosecure

restriction, which includes a ban on new US federal contracts. Although implementation of the Act

will take 12-24m (JEFe), it creates a massive opportunity for Indian CRDMOs, which collectively

recorded ~USD3-3.5bn sales (JEFe) in FY26 vs Apptec's CY25 sales at USD6.3bn. We believe key