SHIFT (3697.T): Initiate at Neutral; outsourcing market for software testing expanding, but risk of AI disruption

研报英文原文证据摘录

SHIFT (3697.T): Initiate at Neutral; outsourcing market for software testing expanding, but risk of AI disruption

8 - Dec. 2025 Absorption-typemerger

Nissay Com Jan. 2026 Conversionsubsidiary to Development and provision of business application packages (a subsidiary of Nissei Holdings) 20,486 20,859 1,093 893

Step Holdings Mar. 2026 Conversionsubsidiary to Large-scale system development in social infrastructure fields (aviation, defense, medical, financial, telecommunications, etc.) 6,000 2,430 430 197

Figures for sales, operating profits, and number of employees are actuals for the most recent fiscal year at the time of the acquisition announcement.

Source: Company data, Data compiled by Goldman Sachs Global Investment Research

Market trends

Software testing market size

While no accurate data on the size of the software testing market exists, SHIFT broadly

estimates the Japan IT market’s size at c.¥16 tn and assumes that software testing work

accounts for c.33% of the entire development process, implying a software testing

market size of c.¥5.5 tn. However, its calculations are based on FY19 data. Taking into

account market growth since then, we estimate Japan’s current software testing

market at around ¥7 tn.

Note that this market size estimate consists mostly of testing processes conducted by

system developers (system integrators and clients) themselves. SHIFT estimates that as

of FY19, the weighting of testing outsourced by system developers to specialized

software testing vendors was c.1% of the overall market. On our calculations, we

believe this outsourcing ratio has more recently risen to around 3%, with the

outsourcing of software testing to specialized vendors having accelerated over the

past few years.