Disco Corp Hits 52-Week High as AI Drives Record Demand
The Japanese semiconductor equipment maker raised its full-year forecast, signaling sustained momentum from the global build-out of generative AI infrastructure.
Shares of Disco Corp (DSCSY), a critical Japanese manufacturer of semiconductor equipment, surged 4.9% to a new 52-week high of $38.59 in recent trading after the company posted strong quarterly results and lifted its financial outlook, citing unstoppable demand from the artificial intelligence sector.
The company, whose specialized tools are essential for mass-producing high-performance chips, has become a key beneficiary of the global arms race in AI. Investors pushed the stock higher after the firm revealed robust earnings and, more significantly, raised its full-year net sales forecast to ¥419.0 billion, indicating that the AI-driven boom has staying power.
For the nine months ending December 31, 2025, Disco reported a formidable 11.5% year-over-year increase in net sales to ¥303.83 billion. According to the company's official financial statements, net income for the period also climbed 8.7% to ¥92.6 billion, showcasing strong profitability amid the demand surge.
At the heart of Disco’s success is its near-dominant position in a highly specialized, indispensable part of the chipmaking process. The company holds an estimated 70-80% market share in equipment for dicing, grinding, and polishing silicon wafers. These processes, known in Japan as kiru, kezuru, migaku (cut, grind, polish), are fundamental to thinning and separating wafers into the individual dies or chips that power everything from smartphones to the most advanced AI accelerators in data centers.
This niche has become increasingly vital with the advent of complex chip designs like high-bandwidth memory (HBM), which are stacked vertically to enable the massive data throughput required by large language models. The precision offered by Disco's tools is paramount for the successful manufacturing of these intricate, high-value components.
The market's enthusiastic reaction reflects confidence in Disco’s role as a mission-critical supplier to the world's leading foundries. The third-quarter performance was particularly strong, with net sales of ¥109.29 billion growing 17% year-over-year, handily beating market expectations. In a further sign of confidence, the company also announced it was raising its annual dividend forecast to ¥437 per share.
The results position Disco as a prime example of a 'picks-and-shovels' investment in the generative AI gold rush. While chip designers like Nvidia capture the headlines, equipment makers like Disco provide the essential and difficult-to-replicate machinery required for the physical production of their designs. Analysts have maintained a positive outlook, with a consensus "Moderate Buy" rating reflecting the company's powerful market position and growth trajectory.
Looking ahead, Disco's revised forecast suggests its management sees a clear runway for growth as data center operators and cloud providers continue to pour capital into AI infrastructure. While the semiconductor industry is notoriously cyclical, the current structural shift toward accelerated computing appears to be providing a powerful, sustained tailwind for key equipment providers. The company's performance is now a key barometer for the health of the broader AI supply chain, from Tokyo to Silicon Valley.