⚔️【Thorough Comparison】Tokyo Electron vs Advantest vs DISCO | Does the 'Ability to Convert' AI Semiconductor Demand into Profits Make the Difference? Where is the Closest '💰Cash Cow'? (Q1 FY2027)

*In August 2026, I revised the evaluation criteria for '💰Cash Cows'. The current article is calculated based on the new evaluation criteria.

Hello!
Paponyan🌹🌳 here.

I define stocks of companies that can be expected to have
increasing revenue, increasing profit, and increasing dividends into the future as
"💰Cash Cows and score them using my own evaluation system.

📘 Click here for the definition, evaluation criteria, and explanation of various indicators for '💰Cash Cows'👇

✅Analysis Targets for this time
• Tokyo Electron (8035)
• Advantest (6857)
• DISCO (6146)
👉 Target: Q1 FY2027 Financial Results (Common to all 3 companies)

⭐ Key Points for this time
Tokyo Electron is capturing AI demand in the front-end semiconductor manufacturing process, Advantest in the testing process, and DISCO in the dicing and grinding process. While all three companies have high profitability and strong finances, there are differences in their growth speed and earnings volatility. The biggest point of contention is how much each company can convert the expansion of AI investment into sustainable profit growth in their respective processes. The strength of AI-related demand has been confirmed for all three companies in the latest Q1.

Regarding the suitability of '💰Cash Cows', I will look at them in detail from the three perspectives of Growth, Safety, and Profitability based on the '📊Score Diagnosis Sheet' and the '🔍10-Year Trend Graph' for each indicator.

This article is intended for corporate and financial analysis and does not recommend buying or selling specific stocks. Please make investment decisions at your own responsibility.

📊Score Diagnosis Sheet for each company

1️⃣ Comparison of Growth

*Regarding growth, the figures for each company's base year are indexed as 100 for easy comparison.

→ Analysis comments on growth. Tokyo Electron has a growth score of 58/60.
It shows high growth with 11.3% in revenue, 12.8% in profit, and 15.2% in dividends, but it has increased or maintained dividends 7/10 times. With the base year = 100, all three indicators are on an upward trend, but there are also fluctuations due to the business cycle. In Q1, revenue increased by 33.3% year-on-year and operating profit increased by 46.1%, and the first-half forecast was also revised upward due to increased investment in advanced fields.

Advantest has a growth score of 59/60. Its growth speed is outstanding, with 24.5% in revenue, 39.1% in profit, 18.8% in dividends, and 8/10 times for dividend increases/maintenance. Even with the base year = 100, the growth after the 2023 fiscal year slump is prominent. In Q1, revenue increased by 39.3% year-on-year and operating profit increased by 53.3%, and the full-year forecast has also been revised upward against the backdrop of an increase in the quantity and complexity of AI semiconductors.

DISCO has a growth score of 59/60. It is well-balanced and at a high level, with 14.9% in revenue, 21.9% in profit, 19.4% in dividends, and 8/10 times for dividend increases/maintenance. With the base year = 100, it shows a more stable upward trend than the rapidly rising Advantest. In Q1, revenue increased by 27.1% year-on-year and operating profit increased by 42.2%, and quarterly shipments reached a record high against the backdrop of demand for generative AI, etc.

2️⃣ Comparison of Safety

→ Analysis commentary on safety
Tokyo Electron has a safety score of 19/20. With a current ratio of 263.3%, equity ratio of 61.2%, and net D/E ratio of -0.23x, it has sufficient capacity, but its fixed ratio of 63.8% is the only point deducted. Its financial health remains high over a 10-year trend, maintaining a financial foundation that can support both growth investment and shareholder returns.

Advantest has a safety score of 20/20. Equity ratio of 68.8%, fixed ratio of 32.2%, and net D/E ratio of -0.29x. The fixed ratio, in particular, has improved significantly from past high levels. It has sufficient financial leeway even in a phase of accelerating investment in production capacity and R&D to meet expanding demand.

DISCO has a safety score of 20/20. With a current ratio of 300.5%, equity ratio of 77.3%, and net D/E ratio of -0.49x, it has the thickest financial structure among the three companies. It has maintained a high equity ratio and net cash over a 10-year trend, which translates into resilience against economic downturns and the power to support growth investment and dividend increases.

3️⃣ Comparison of Profitability

→ Analysis commentary on profitability
Tokyo Electron has a profitability score of 20/20. Operating profit margin of 26.6% and ROIC of 34.5% are at high levels. Over a 10-year trend, it has maintained high profit margins despite being subject to business cycles. Its Q1 operating profit margin was 28.9%, and its strength lies in its ability to generate profit from a wide range of front-end equipment.

Advantest has a profitability score of 20/20. With an operating profit margin of 40.9%, ROA of 48.9%, ROE of 54.6%, and ROIC of 77.6%, its capital efficiency is outstanding. Its Q1 operating profit margin rose to **51.7%**, with demand for high-value-added testers for AI and economies of scale from increased revenue boosting profit margins.

DISCO has a profitability score of 20/20. With an operating profit margin of 42.4% and ROIC of 49.5%, it is extremely high, and its profit margin improvement has been relatively stable over a 10-year trend. Its Q1 operating profit margin is 42.9%. In addition to equipment, precision processing tools (consumables), for which demand arises with the operation of the equipment, also support high profitability.

4️⃣ Comparison of Other Indicators

🌳 General Review

Tokyo Electron has strengths in its wide range of front-end equipment and solid finances. The company expects the 2027 WFE market to exceed $190 billion and sees the base for AI-related investment expanding from GPUs and HBM to CPUs and general-purpose memory. On the other hand, it lags behind the other two companies in terms of growth speed and dividend increase track record.

Advantest is the most strongly converting the increasing test demand caused by the complexity of AI semiconductors into business performance. The company has raised its 2026 tester market forecast by approximately 19% since April, and its growth and profitability are remarkable. However, supply capacity to meet rapidly increasing demand is the key to the future.

DISCO has strengths in its thickest financial foundation, profit margins exceeding 40%, and a revenue structure of equipment + consumables. On the other hand, at this point, earnings forecasts are only provided up to the first half rather than the full year, so caution is required regarding fluctuations in semiconductor capital investment.

The total scores are Tokyo Electron 97 points, Advantest 99 points, DISCO 99 points. By my definition of a "💰 Cash Cow," I evaluate that Advantest is currently the closest among the comparison targets. Even compared to DISCO, which has the same score, I evaluated it higher because, in addition to the current acceleration in growth, it is most effectively connecting the structural tailwind of not just "increased quantity" of AI semiconductors but "increased test volume due to complexity" to profit growth.

✏️ Click here for articles on other companies you might be interested in

Thank you for reading this far! 🙇‍♂️
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Paponyan🌹🌳