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Today, we will examine from various angles the sustainability of the semiconductor stock rally within Japan's Nikkei 225 index, a recent hot topic in global stock markets.
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Key Summary
U.S., European, and Asian stock markets are showing a distinct fundamental decoupling phenomenon amidst different macroeconomic environments.
Particularly amidst the hawkish stances of the U.S. Federal Reserve (Fed) and the European Central Bank (ECB), there is a possibility that the Japanese Nikkei 225 index will show a differentiated trend centered around semiconductor equipment stocks.
Overall investor sentiment has significantly contracted recently due to growing concerns about geopolitical instability in the Middle East and a reduction in global liquidity.
In fact, the Fear & Greed Indices for the KOSPI and NASDAQ markets have recorded very low levels, proving the expanded volatility across global stock markets.
Current Situation Summary
As of intraday trading on March 20, 2026 (provisional), global stock markets are strongly intertwined and affected by complex macroeconomic variables.
On this day, the NASDAQ index recorded 21,993.22, the KOSPI index 5,763.22, and the KOSDAQ index 1,143.48, maintaining tight tension on an intraday basis (provisional).
According to Daily Stock's own Fear & Greed Index, the NASDAQ is currently in a state of 'Extreme Fear (16.5),' indicating further deterioration in sentiment compared to 'Fear (22.5)' one week ago.
The KOSPI is also currently in a 'Fear (36.1)' phase, showing a significant retreat from 'Neutral (57.1)' one month ago and 'Neutral (50.2)' three months ago.
In the foreign exchange market, the KRW/USD exchange rate surged to 1,495.30 KRW (intraday basis, provisional), demonstrating the pressure on Asian currencies from the strong dollar trend and raw material price instability stemming from the Middle East.
On the other hand, the Japanese stock market is emerging as a key beneficiary of the global semiconductor supply chain reorganization, with the BOJ maintaining its benchmark interest rate at the 0.75% level on March 19, partially resolving policy uncertainty.
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Financial Analysis
Tokyo Electron (TEL) and Advantest, the two leading companies in the Japanese semiconductor equipment sector, are proving solid fundamental strength driven by expanding global AI demand.
Tokyo Electron is maintaining a virtually global monopolistic position in the track equipment market for next-generation EUV (extreme ultraviolet) processes, with solid growth in order backlogs expected.
Advantest is also enhancing its earnings defense capability, supported by an explosion in demand for testing equipment for advanced semiconductors such as High Bandwidth Memory (HBM).
Both companies are significantly increasing their research and development (R&D) investments based on stable cash flows, raising the possibility of gaining an advantageous position in future next-generation technological competitiveness.
| Company Name | Key Core Business | 2026 Earnings Growth Driver | Global Market Position |
|---|---|---|---|
| Tokyo Electron (TEL) | Coater/Developer, Etching Equipment | Logic for AI servers and advanced memory fab investments | Approx. 100% market share in EUV track equipment |
| Advantest | High-performance semiconductor testing equipment | Demand for high-value-added memory testing such as HBM | Ranked 1st in global memory testing equipment market share |
Note: The above content synthesizes the latest market analysis, and the exact prices of individual stocks on the day remain unverified (based on the latest confirmed values).
Valuation
Currently, there is a clear differentiation in valuation relative strength progressing among U.S. Big Tech, European cyclicals, and Japanese semiconductor stocks.
While the U.S. stock market suffers from overvaluation controversies and wariness of monetary tightening, there is an assessment that Japanese semiconductor stocks are in a relatively attractive valuation range thanks to steep earnings growth rates.
Compared to the European stock market, which is weighed down by structural low-growth dilemmas and rising energy costs, the premium enjoyed by Japanese semiconductor stocks can serve as an alternative destination for global funds.
However, as the proportion of tech stocks within the Nikkei 225 index is massive, it is hard to rule out the possibility that the burden of overvaluation could be sharply highlighted if the global semiconductor industry cycle turns downwards.
Expert & Institutional Analysis
Major global investment banks (IBs) analyze that this year's macro fundamental decoupling of the U.S., Europe, and Asia is the key variable that will determine the performance of leading stocks in each country's stock market.
Jefferies and BNP Paribas have positively assessed that Japan is establishing itself as the most stable infrastructure hub in the U.S.-led semiconductor supply chain reorganization process.
Moreover, in contrast to the People's Bank of China (PBOC) supplying liquidity to defend its economy, the policy difference of the BOJ moving toward monetary policy normalization is accelerating the divergence of fund flows within the Asian region.
However, cautious views also arise that if the BOJ carries out additional interest rate hikes in the future, causing the yen to turn strong, the earnings momentum of highly export-dependent Japanese semiconductor companies could somewhat slow down.
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Risk Factors
The short-term risk to be most cautious of is the possibility of a spike in international oil prices, such as Brent crude, due to rising geopolitical tensions in the Middle East, including Iran.
This could be a direct hit to the economic fundamentals of Japan and South Korea, which have an absolutely high dependence on energy imports, raising concerns about exacerbating the cost burden on companies.
Additionally, the volatility of copper prices, a key global raw material, and the global trade tariff barriers that may intensify after the U.S. presidential election must also be closely monitored.
If rare earth export controls by certain countries or logistical bottlenecks in major straits are triggered, there remains a constant risk of unexpected disruptions in the global semiconductor production supply chain.
Investment Perspective Summary
At the current juncture, the sustainability of the Nikkei 225 semiconductor stock rally relies heavily on structural global AI demand and the strong technological moats of Japanese materials, components, and equipment companies.
Therefore, even amidst sporadic correction phases in global stock markets, these companies have the potential to prove robust earnings defense capabilities in the mid-to-long term.
However, as indicated by the NASDAQ's 'Extreme Fear' sentiment indicator, a tightening macro environment is a potential trigger that can unleash panic selling volumes into the market at any time.
Consequently, it is time for investors to pay close attention to macroeconomic indicators and the decisions of policymakers, and consider a portfolio approach based on conservative and conditional scenarios.
Investor Checkpoints Q&A
Q1. What is the core background of the fundamental decoupling among the U.S., European, and Japanese stock markets?
A1. The U.S. is experiencing prolonged tightening due to robust employment and sticky inflation, while Europe is facing burdens from energy costs and fears of an economic recession.
In contrast, Japan is interpreted as having secured an independent driving force by simultaneously benefiting from improved corporate governance and the global supply chain reorganization against the backdrop of an accommodative monetary environment.
Q2. What is the impact of the BOJ's interest rate normalization on Japanese semiconductor stocks?
A2. When the benchmark interest rate rises, it triggers a strong yen, which can act as a negative factor that reduces the book translation profits of export-oriented Japanese semiconductor companies.
However, there is also an observation that the current demand for global semiconductor facility investments is very strong, which will partially offset the impact of short-term exchange rate fluctuations.
Q3. Why does Tokyo Electron (TEL) command a high premium in the global market?
A3. It is because the company holds a market share of nearly 100% in the coater and developer equipment market for EUV, which is indispensable for next-generation semiconductor manufacturing.
As the competition in micro-processing among global Fab companies intensifies, dependence on companies with such irreplaceable technological prowess is bound to increase.
Q4. What are the implications of the People's Bank of China's (PBOC) actions on Asian stock markets?
A4. The PBOC is maintaining an accommodative monetary stance to overcome sluggish domestic demand, showing a distinct policy difference from the U.S. and Japanese central banks, which are contemplating tightening.
This divide phenomenon can act as a factor causing global fund capital within Asia to shift towards Japan or other emerging countries with relatively higher earnings visibility.
Q5. What are the most crucial macroeconomic indicators to track when investing in semiconductor stocks?
A5. Along with the trend of the Global PMI index, which can gauge the worldwide manufacturing economy, it is essential to check the movements of key raw materials like copper and oil prices.
Additionally, the results of the monetary policy meetings of the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan will serve as key rudders determining the liquidity-driven market conditions across the entire market.