Tokyo Electron targets 40% AI-driven sales by FY2026 - here's how sales teams can win the shift
Export controls are squeezing orders from China, and Tokyo Electron (TEL) is moving fast to replace that demand with higher-value equipment for AI chips. Per interviews cited by Nikkei, TEL expects gear for advanced chips to reach nearly 40% of total sales by fiscal 2026, with more than 30% already in fiscal 2025. For sales professionals, that's a clear signal: the growth is in AI servers, AI PCs, and AI smartphones-sell into that momentum.
At the same time, TEL's China exposure is stepping down: 42% of sales in fiscal 2024, about 35% in fiscal 2025, and unclear if it drops below 30% in fiscal 2026. The gap will be filled by higher-value products for AI and memory upgrades as utilization climbs. Translate that into account shifts, new talk tracks, and a tighter focus on customers running AI-heavy roadmaps.
Where the money moves
- Advanced-node equipment tied to AI servers, AI-enabled PCs, and smartphones is set to drive 30%+ of sales in FY2025 and nearly 40% by FY2026.
- Etching gear in the DRAM wiring process is a standout. High Bandwidth Memory (HBM) demand for AI is fueling orders, with sales in FY2024 at several tens of billions of yen and cumulative sales expected to exceed ¥500 billion by FY2030.
- China mix down from 42% (FY2024) to ~35% (FY2025). Build pipeline elsewhere to neutralize concentration risk.
Timing signals for your pipeline
- Data-center spend is keeping memory demand strong. Memory makers are lifting tool utilization and asking for upgrades now.
- Large-scale new DRAM equipment buys likely start in the second half of 2026. NAND spending comes even later.
- Near-term opportunity: upgrades, process improvements, and services. Mid-term wave: new tool placements as DRAM capex ramps.
Sales plays that fit the moment
- Ideal customer profile: DRAM leaders scaling HBM, foundries building AI accelerators, and fabs serving AI PC/phone roadmaps. Prioritize Korea, Taiwan, Japan, the U.S., and Singapore.
- Buyer roles to target: VP/Director of Manufacturing, CapEx Planning, Procurement, and Production Engineering. Map influence early; build multi-threaded relationships.
- Message to value: throughput gains, yield stability, etch selectivity, and faster time-to-qualification for AI-centric lines. Tie outcomes to cost per bit and bandwidth targets.
- Common objections: "Budget locked until 2H26." Counter with ROI-backed upgrades, retrofit packages, and service contracts that lift utilization now.
- Attach strategy: bundle process upgrades, spares, and maintenance to every installed-base conversation. Land with upgrades, expand with tool placements as capex opens.
Territory and quota implications
- Reduce quota dependence on China accounts. Reweight territories toward memory and logic customers accelerating AI production outside China.
- Build joint plans with channel and compliance teams to keep deals clean under export rules. Document end-use and end-user diligence early to avoid late-stage stalls.
- Add hyperscaler-adjacent targets through foundry and OSAT partners. Your wedge: faster AI deployment with better yields and cycle times.
What to say in meetings
- "We can lift utilization and yield on existing lines before your next capex window. Here's a 90-day upgrade plan and the modeled cost-per-bit impact."
- "HBM wiring is your bottleneck. Our etch package improves selectivity and uniformity-fewer reworks, more good die."
- "As DRAM capex opens in 2H26, we'll stage a phased tool rollout tied to your AI server demand curve to control cash flow."
Risk watch: the TSMC leak case
Prosecutors in Taiwan indicted TEL's local subsidiary in a case involving alleged 2nm technology leaks by former TSMC engineers. TEL says it's strengthening prevention measures, and the relationship with TSMC remains steady. Industry views point to limited financial exposure; a potential fine could reach up to NT$120 million (about US$3.8 million) if the subsidiary is found guilty.
How to handle it in sales calls: acknowledge the headline, emphasize compliance controls, and keep the conversation on operational outcomes and delivery timelines.
Metrics to track weekly
- Pipeline share tied to AI servers/AI PC-smartphone programs
- Etch tool attach rate for HBM lines and follow-on upgrades per site
- Upgrade vs. new-tool mix and average sales cycle by product
- China exposure by rep/territory and quarter
- DRAM/NAND utilization indicators and AI data-center capex signals
Sources
Reporting and figures cited from Nikkei and TechNews.
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