---
title: "Tokyo sold SCREEN's second half before it ships"
description: "The wafer-cleaning toolmaker posted a 35% revenue quarter and record orders, then took the Nikkei 225's worst fall of the day. The gap between the demand it can see and the profit it has booked is the entire trade."
publisher: "The Inference"
section: "Chips"
published: 2026-11-02T16:03:22.142Z
modified: 2026-11-02T16:03:22.142Z
canonical: https://theinference.org/article/tokyo-sold-screen-s-second-half-before-it-ships
language: en
keywords: "Earnings, Guidance, Semiconductors, Chip Equipment, Japan"
---

# Tokyo sold SCREEN's second half before it ships

> The wafer-cleaning toolmaker posted a 35% revenue quarter and record orders, then took the Nikkei 225's worst fall of the day. The gap between the demand it can see and the profit it has booked is the entire trade.

## Tokyo's worst fall came off a record quarter

[SCREEN Holdings](https://theinference.org/markets/companies/screen-holdings), the Kyoto company whose wafer-cleaning tools run inside chip plants worldwide, closed November 2 at ¥9,218, down 18.96%, [the steepest decline of any Nikkei 225 component that session](https://www.marketscreener.com/news/japan-s-nikkei-slumps-3-as-tech-stocks-tumble-on-ai-worries-ce785fdad088fe2d) [1][2]. The fall landed two trading days after the company [reported September-quarter revenue of ¥186 billion](https://www.morningstar.com/company-reports/1507074-screen-holdings-earnings-supply-constraints-cap-near-term-growth-long-term-competition-intensifies), up 35% year on year, at a 22% operating margin, a 558-basis-point improvement [3], and after management [called its order intake a record](https://www.tradingview.com/news/urn:summary_document_transcript:quartr.com:4391643:0-screen-holdings-spe-growth-and-record-orders-support-unchanged-guidance-as-capacity-expansion-targets-next-year-s-demand/) [4].

On October 30, when the Nikkei slid as much as 3% on worries over the sustainability of AI spending, [Lasertec](https://theinference.org/markets/companies/lasertec) was the named equipment loser, down 8.8%, and SCREEN was not among them [2]. Two sessions later the positions reversed: Lasertec rose 8.01% and SCREEN took the index's worst fall [1]. The market did not dispute the quarter just delivered. It repriced the six months still to be earned.

## The forecast has not moved, and that is the problem

First-half results were strong: [sales of ¥308.453 billion, up 12.5%, and operating profit of ¥54.523 billion, up 17.4%](https://japanir.jp/en/company/company-7735/ir/7735-20261030-01_wp_financial_summary/) [5]. Guidance stayed at ¥743 billion of sales and ¥156.5 billion of operating profit for the year ending March 2027 [5].

The arithmetic that follows is the selloff's engine: the second half must earn ¥101.977 billion of operating profit, 1.87 times the first half, at a 23.47% margin against the 17.68% just booked [1]. Meanwhile [first-half operating cash flow ran negative](https://www.tradingview.com/news/urn:summary_document_report:quartr.com:3903505:0-screen-holdings-sales-and-earnings-advanced-but-inventory-driven-cash-outflow-weighed-on-h1-performance/) as inventory and other working capital drained [6], and the company concedes installation timing pushed some revenue into later quarters [4].

*Chart: **Guidance asks for ¥102B of operating profit in the second half, 1.87 times the ¥54.5B just earned** Column chart of SCREEN Holdings operating profit for the fiscal year ending March 2027: H1 FY2027 54.5 billion yen reported, H2 FY2027 102.0 billion yen implied by unchanged full-year guidance, and full-year guidance of 156.5 billion yen.*

*SCREEN Holdings operating profit, fiscal year ending March 2027, in billions of yen. H2 guided is the full-year guidance of ¥156.5 billion minus the reported first half of ¥54.5 billion, the difference TECHi's profit bridge puts at ¥101.977 billion. Sources: [1], [5]. [1][5]*

## The sellers' exhibits sit in the company's own filings

The bear case needs no speculation. Operating cash flow went backwards in the half while profit grew [6]. The new capacity built for the demand boom, the ¥25 billion Nagaokakyo plant, [starts producing wafer-cleaning equipment in January 2028](https://www.screen.co.jp/en/news/NR261030E) [7], a fiscal year after the guidance now being priced. Foundry demand weakened even as DRAM strengthened, and sales mix shifted toward the United States and Korea and away from Taiwan [1]. Every point of the required margin jump must come from tools already delivered but not yet accepted and invoiced.

## The buyers' exhibits are contracts, not forecasts

[SK hynix](https://theinference.org/markets/companies/sk-hynix), the Korean memory maker, said in late October that [long-term agreements cover more than half of its 2027 and 2028 production capacity across 14 major customers](https://www.remio.ai/post/sk-hynix-partners-day-brings-japanese-suppliers-into-ai-memory-planning), and it named SCREEN at its first Japan Partners Day among the suppliers invited to plan ahead with it [8].

SCREEN's own view of the wafer-fab-equipment market rose to $155 billion for 2026 and $200 billion for 2027 [3]. Its semiconductor production equipment segment grew on DRAM demand and post-sales service [5], and management says this year's capacity investment aims squarely at next fiscal year's demand [4].

## A cheaper multiple is not automatically a bargain

At ¥9,218 the shares trade at [15.17 times company-guided earnings](https://www.techi.com/lasertec-vs-screen-stock-tokyo-profit-forecast/), against Lasertec's 40.59 times; both figures come from dividing the November 2 close by each company's own published per-share earnings forecast [1]. The contrast sharpens the point: Lasertec's latest quarter showed operating profit down 41%, and its stock rose 8.01% the same day [1]. A cheaper multiple is not automatically a bargain when the plan behind it asks for an 87% profit acceleration inside six months [1].

## The next two quarterly reports settle this argument

The test is conversion, not demand. Watch the next two quarterly reports: if second-half recognized sales and margin climb toward the implied 23.47% [1], Monday's fall was a bet on timing; if orders keep landing without becoming revenue, or foundry stays weak, the ¥101.977 billion second-half target is exposed and the discount was earned [1].

*Chart: **The guided second half needs a margin 5.79 points above the one just reported** Bars chart of SCREEN Holdings operating margin for the fiscal year ending March 2027: 17.68% reported for H1 FY2027, 21.07% calculated from guided operating profit of ¥156.5 billion on guided sales of ¥743 billion, and 23.47% implied for the second half.*

*SCREEN Holdings operating margins for the fiscal year ending March 2027, in percent. The 21.07% full-year bar is calculated from guided operating profit of ¥156.5 billion on guided sales of ¥743 billion, both unchanged guidance figures [5]; the 23.47% second-half margin is the guidance-implied figure from TECHi's profit bridge [1]. Sources: [1], [5]. [1][5]*

## Takeaway

SCREEN Holdings beat the quarter and left guidance untouched, but unchanged guidance implies ¥101.977 billion of second-half operating profit at a 23.47% margin against 17.68% just booked; the 18.96% one-day fall prices that conversion risk, while record orders and SK hynix's long-term agreements argue the demand behind it is real.

## Sources

1. [TECHi, Lasertec vs SCREEN stock: Tokyo's 27-point split tests profit plans, 2 November 2026](https://www.techi.com/lasertec-vs-screen-stock-tokyo-profit-forecast/)
2. [Reuters via MarketScreener, Japan's Nikkei slumps up to 3% as tech stocks tumble on AI worries, 29 October 2026, modified 30 October 2026](https://www.marketscreener.com/news/japan-s-nikkei-slumps-3-as-tech-stocks-tumble-on-ai-worries-ce785fdad088fe2d)
3. [Morningstar company report, Screen Holdings Earnings: Supply Constraints Cap Near-Term Growth; Long-Term Competition Intensifies, October 2026](https://www.morningstar.com/company-reports/1507074-screen-holdings-earnings-supply-constraints-cap-near-term-growth-long-term-competition-intensifies)
4. [TradingView (Quartr transcript summary), SCREEN Holdings: SPE growth and record orders support unchanged guidance as capacity expansion targets next year's demand, 31 October 2026](https://www.tradingview.com/news/urn:summary_document_transcript:quartr.com:4391643:0-screen-holdings-spe-growth-and-record-orders-support-unchanged-guidance-as-capacity-expansion-targets-next-year-s-demand/)
5. [Japan IR, SCREEN Holdings Co., Ltd. Financial Summary, Q2 Interim Fiscal Year Ending March 2027, 2 November 2026](https://japanir.jp/en/company/company-7735/ir/7735-20261030-01_wp_financial_summary/)
6. [TradingView (Quartr report summary), SCREEN Holdings: Sales and earnings advanced, but inventory-driven cash outflow weighed on H1 performance, 30 October 2026](https://www.tradingview.com/news/urn:summary_document_report:quartr.com:3903505:0-screen-holdings-sales-and-earnings-advanced-but-inventory-driven-cash-outflow-weighed-on-h1-performance/)
7. [SCREEN Holdings news release, SCREEN to secure an additional production capacity in Nagaokakyo, 30 October 2026](https://www.screen.co.jp/en/news/NR261030E)
8. [remio, SK hynix Partners Day Brings Japanese Suppliers Into AI Memory Planning, 2 November 2026](https://www.remio.ai/post/sk-hynix-partners-day-brings-japanese-suppliers-into-ai-memory-planning)


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Tokyo sold SCREEN's second half before it ships — The Inference. Canonical: https://theinference.org/article/tokyo-sold-screen-s-second-half-before-it-ships