Tokyo Electron’s Place in Global Semiconductor Manufacturing

Japan's most valuable semiconductor company is a major exporter of the many machines needed to make computer chips. With demand rising, its main challenge is staying on the technological frontier.

Tokyo Electron workers operating a machine. Photo courtesy of Tokyo Electron. Source.

Despite having fewer than 20,000 employees, the Japanese company Tokyo Electron is the fourth-largest semiconductor manufacturing equipment company after Dutch ASML and the U.S. firms Applied Materials and Lam Research.¹ While ASML builds and sells hundreds of specialized photolithography machines annually, Tokyo Electron manufactures thousands of machines that perform particular functions throughout the semiconductor production process. These functions range from deposition, to coating and developing photoresists, to dry etching, to cleaning. As of 2023, Tokyo Electron’s revenue was ¥2.2 trillion Japanese yen, or around $14 billion.² It is Japan’s fourth-most valuable company as of June 2024 with a market capitalization of $101 billion.³ The company’s revenue has quadrupled in ten years and the company is also highly profitable, boasting an operating margin of 28% in 2023.⁴ While it is not the only company that sells the chip assembly line, it has a near-monopoly in “coater/developer” machines and is the favored partner of ASML, the only company that makes the most advanced extreme ultraviolet (EUV) lithography machines that make the most advanced chips available today.