Disco Corporation (6146.T) fair value

ACCE thesis

Disco makes the dicing saws, grinders and laser-processing tools that cut silicon wafers into individual chips, and it sells its own consumables, mainly diamond and bonding blades, that customers must replace continuously. That installed base is the core of the moat: a fab that qualifies Disco equipment has little reason to switch, and the consumables revenue recurs with every wafer cut. Revenue grew 27.1% and the operating margin reached 42.7% with a 70.8% gross margin, which is unusually high for a capital equipment maker and points to pricing power in a niche with few credible competitors. The near-term driver is the AI and advanced-packaging build-out, where chip stacking and high-bandwidth memory require more precise cutting and grinding steps, and that is where Disco's laser and grinding lines are positioned. At 39.9 times trailing earnings and 37.6 times forward, the stock is priced for that growth continuing, so the case rests on whether packaging demand holds up through the semiconductor cycle, which has historically been the risk to watch.