Japan Technology: Semiconductors: Investor feedback: Sentiment improving despite concerns about AI investment/higher interest rates

We summarize the FAQs and feedback from our recent meetings with investors, having held roughly 30 meetings on our visit to Singapore from September 29 to October 2. Investor sentiment toward the semiconductor/SPE sector still does not appear very strong, amid concerns about the sustainability of AI capex from 2028 onward as well as upward pressure on interest rates in Japan and the US. However, with no particular signs of a slowdown in earnings growth, valuation multiples for an increasing number of stocks have fallen below mid-cycle levels, and few investors seem to expect the trend of declining share prices/multiples seen up through July-September to continue through year-end. Many investors also said they would consider proactively adding to positions in names with scope for generating earnings that beat market consensus forecasts. On individual stocks, many investors were bullish on Advantest and Kokusai Electric, while quite a few remained bearish on Lasertec and Disco due to rel