Morganstanley

RESEARCHFoundation

October28,202512:32AMGMT

InvestorPresentation|AsiaPacific

Globalvs.ChinaAI)Oldvs.NewMemoryandSPE

MorganStanley&Co.Internationalplc+

ShawnKim

EquityAnalyst

Shawn.Kim@

+44207677-1018

MorganStanleyTaiwanLimited+

CharlieChan

EquityAnalyst

Charlie.Chan@

+88622730-1725

MorganStanleyMUFGSecuritiesCo.,Ltd.+

TetsuyaWadaki

EquityAnalyst

Tetsuya.Wadaki@

+8136836-8890

MorganStanleyTaiwanLimited+

DanielYen,CFA

EquityAnalyst

Daniel.Yen@

+88622730-2863

MorganStanleyappreciatesyoursupportinthe2026Extel(ex-InstitutionalInvestor)

AsiaResearchSurvey.Votingopens12November2025.

S.KoreaTechnology

AsiaPacific

IndustryViewAttractive

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthis

report.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

Morganstanley

RESEARCH

Foundation

2

HeadofAsiaandEuropeTechnologyResearch

ShawnKim

Memorystockpricesprecedeearningsupgrades

PBROE(%)ROE%(e)

2.330

2.125

1.920

1.715

1.510

1.35

1.10

0.9-5

0.7-10

0.5-152006200720082009201020112012201320142015201620172018201920202021202220232024202520262027

Source:FactSet,MorganStanleyResearch.Averageofthreememoryplayers(SamsungElec,MicronandHynix).

MorganStanleyResearch3

4

MemorystockP/Bvs.DRAMcontractgrowthYoY

160.0%

110.0%

60.0%

10.0%

(40.0%)

DRAMContractYoY(RHS)NTMPB-DRAM

2.3x

2.1x

1.9x

1.7x

1.5x

1.3x

1.1x

0.9x

0.7x

(90.0%)0.5x

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Jan-19

Apr-19

Jul-19

Oct-19

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22

Oct-22

Jan-23

Apr-23

Jul-23

Oct-23

Jan-24

Apr-24

Jul-24

Oct-24

Jan-25

Apr-25

Jul-25

Oct-25

Jan-26

Source:Quantwise,MorganStanleyResearch.

MorganStanleyResearch5

JapanSemiconductorProductionEquipment

TetsuyaWadaki

6

SemiconductorProductionEquipment:F3/262QResultsPreview(22Oct2025)

nFlashmemorymarketrecoveringonshifttonearlinestorageSSDscausedbyHDDshortage.RecoveryforSPEdemandnotvisibleatthisstage.

nIncreasingmedium-termgrowthprospectsforHBM,butsomemakerscurbingnear-termback-endinvestmentduetolackoffront-endcapacity.

nForfront-endSPE,rolloverwithChineseDRAMinvestmentposesnear-termguidancerisk.UncertaintyonChinatraderegulationsweighingoninvestmentdecisions.

nFocusonback-endSPEmakers,whicharenotasaffectedbyChinatraderegulationsandgainmorefromgrowthinsmartphonemarketandadvancedpackagingdemand.

nDiscohaslowearningsriskfromregulationsonChina,withHBM,12-inchSiC,VCS,OSAT,NANDCBA,WMCM,andPLPdrivingearnings.

MorganStanleyResearch7

Etchingsystems

60

50

40

30

20

10

0

Share(%)Worldwide($mn)

9799010305070911131517192123

25,000

20,000

15,000

10,000

5,000

0

CY24WWmarket$17.1bn

Hitachi-

AMEC

6%

NAURA

6%

Hightech2%

LamResearch

AMAT42%

17%

TokyoElectron24%

TotalMarketLamResearch,%TokyoElectron,%

AMAT,%◆Hitachi-Hightech,%

Source:Companydata,SEMI,MorganStanleyResearch

Morganstanley

RESEARCH

Foundation

8

Maskinspectionequipment

Share(%)Worldwide($mn)

1002,500

802,000

601,500

401,000

20500

00

969800020406081012141618202224

TotalMarketKLA,%CarlZeiss,%Lasertec,%AMAT,%

Source:Companydata,SEMI,MorganStanleyResearch

CY24WWmarket$2.1bnCarlZeiss

6%AMAT

1%

KLA38%

Lasertec50%

Morganstanley

RESEARCH

Foundation

MorganStanleyResearch9

SCREENHoldings(￥13,750):DowngradetoEWonRecentSharePriceGainsandLow

MemorySalesWeighting(21Oct2025)

nDowngradedfromOWtoEW.SharepricegainshavenarrowedthegapvsourPT.

nSCREEN’ssalesweightinginmemorywasalow14%inF3/25,anditstandstobenefitrelativelylittlevspeersfromthememorysupercycle.

nTheriskofdecliningsalestoChinaisincreasingduetothetighteningoftraderegulationsagainstChina.

nBasedonF3/26guidance,thecompany’sChinasalesweightingis40%,relativelyhighwithintheindustry,andintheshorttermweseeariskthatsaleswillnotexpandmuchtoChinese

DRAMmakers.

nOperatingratesonproductionlineshavebeenaround80%recently,fairlygoodcomparedwithotherfront-endprocessequipmentmakers.Managementaimstoincreasetheefficiencyof

productionlines.

organstanley

RESEARCH

Foundation

10

ValuationMethodologyandRisks

SCREENHoldings(7735.T)

TargetP/Eis11.9x.SinceToshioHiroebecameCEOinMar2019,therehavebeennounex-pecteddownwardrevisions.WethinkthemarketIstrusthasbeenrestored,andapplyadis-countofjust15%tocorestockTokyoElectronIs14x.OurEPSforecastis￥1,332.2forbaseyearF3/28,whenweexpectthenextearningspeak.

RiskstoUpside

nStronger-than-expectedsmartphonedemandrecovery&semiconductordemand.

Manufacturersaccelerateequipmentinvestment,especiallyinadvancedlogic/foundry,andSCREENexpandsmarketshareinadvancedcleaningequipment

RiskstoDownside

nStagnantdemandforconsumerelectronicdevicesduetohighinflationandfoodprices,impactingsemiconductordemand.US-Chinatradetensionsrestrictequipmentexports.

Morganstanley

RESEARCH

Foundation

MorganStanleyResearch11

DisclosureSection

TheinformationandopinionsinMorganStanleyResearchwerepreparedoraredisseminatedbyMorganStanleyAsiaLimited(whichacceptstheresponsibilityforitscontents)and/orMorganStanleyAsia(Singapore)Pte.(Registrationnumber199206298Z)and/orMorganStanleyAsia(Singapore)SecuritiesPteLtd(Registrationnumber200008434H),regulatedbytheMonetaryAuthorityofSingapore(whichacceptslegalresponsibilityforitscontentsandshouldbecontactedwithrespecttoanymattersarisingfrom,orinconnectionwith,MorganStanleyResearch),and/orMorganStanleyTaiwanLimitedand/orMorganStanley&CoInternationalplc,SeoulBranch,and/orMorganStanleyAustraliaLimited(A.B.N.67003734576,holderofAustralianfinancialserviceslicenseNo.233742,whichacceptsresponsibilityforitscontents),and/orMorganStanleyWealthManagementAustraliaPtyLtd(A.B.N.19009145555,holderofAustralianfinancialserviceslicenseNo.240813,whichacceptsresponsibilityforitscontents),and/orMorganStanleyIndiaCompanyPrivateLimitedhavingCorporateIdentificationNo(CIN)U22990MH1998PTC115305,regulatedbytheSecuritiesandExchangeBoardofIndia(“SEBI”)andholderoflicensesasaResearchAnalyst(SEBIRegistrationNo.INH000001105);StockBroker(SEBIStockBrokerRegistrationNo.INZ000244438),MerchantBanker(SEBIRegistrationNo.INM000011203),anddepositoryparticipantwithNationalSecuritiesDepositoryLimited(SEBIRegistrationNo.IN-DP-NSDL-567-2021)havingregisteredofficeatAltimus,Level39&40,PandurangBudhkarMarg,Worli,Mumbai400018,India;Telephoneno.+91-22-61181000;ComplianceOfficerDetails:Mr.TejarshiHardas,Tel.No.:+91-22-61181000orEmail:tejarshi.hardas@;Grievanceofficerdetails:Mr.TejarshiHardas,Tel.No.:+91-22-61181000orEmail:msic-compliance@whichacceptstheresponsibilityforitscontentsandshouldbecontactedwithrespecttoanymattersarisingfrom,orinconnectionwith,MorganStanleyResearch,andtheiraffiliates(collectively,"MorganStanley").MorganStanleyIndiaCompanyPrivateLimited(MSICPL)mayuseAItoolsinprovidingresearchservices.Allrecommendationscontainedhereinaremadebythedulyqualifiedresearchanalysts.

Forimportantdisclosures,stockpricechartsandequityratinghistoriesregardingcompaniesthatarethesubjectofthisreport,pleaseseetheMorganStanleyResearchDisclosureWebsiteat/researchdisclosures,orcontactyourinvestmentrepresentativeorMorganStanleyResearchat1585Broadway,(Attention:ResearchManagement),NewYork,NY,10036USA.

Forvaluationmethodologyandrisksassociatedwithanyrecommendation,ratingorpricetargetreferencedinthisresearchreport,pleasecontacttheClientSupportTeamasfollows:US/Canada+1800303-2495;HongKong+8522848-5999;LatinAmerica+1718754-5444(U.S.);London+44(0)20-7425-8169;Singapore+656834-6860;Sydney+61(0)2-9770-1505;Tokyo+81(0)3-6836-9000.AlternativelyyoumaycontactyourinvestmentrepresentativeorMorganStanleyResearchat1585Broadway,(Attention:ResearchManagement),NewYork,NY10036USA.

AnalystCertification

Thefollowinganalystsherebycertifythattheirviewsaboutthecompaniesandtheirsecuritiesdiscussedinthisreportareaccuratelyexpressedandthattheyhavenotreceivedandwillnotreceivedirectorindirectcompensationinexchangeforexpressingspecificrecommendationsorviewsinthisreport:CharlieChan;ShawnKim;TetsuyaWadaki;DanielYen,CFA.

.

GlobalResearchConflictManagementPolicy

MorganStanleyResearchhasbeenpublishedinaccordancewithourconflictmanagementpolicy,whichisavailableat

/institutional/research/conflictpolicies

.APortugueseversionofthepolicycanbefoundat

www.morgan

-.br

ImportantRegulatoryDisclosuresonSubjectCompanies

AsofSeptember30,2025,MorganStanleybeneficiallyowned1%ormoreofaclassofcommonequitysecuritiesofthefollowingcompaniescoveredinMorganStanleyResearch:FaduInc,IsuPetasysCo.Ltd.,L&FCoLtd,LeenoIndustrialInc.,LGDisplay,LGInnotek,SKhynix,WonikIPSCoLtd.

Withinthelast12months,MorganStanleymanagedorco-managedapublicoffering(or144Aoffering)ofsecuritiesofLGElectronics,SKhynix.

Withinthelast12months,MorganStanleyhasreceivedcompensationforinvestmentbankingservicesfromSamsungSDI,SKhynix.

Inthenext3months,MorganStanleyexpectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesfromEcoproBM,HDHyundaiElectricCoLtd,L&FCoLtd,LGDisplay,LGElectronics,SamsungElectronics,SamsungSDI,SCREENHoldings,SKhynix.

Withinthelast12months,MorganStanleyhasreceivedcompensationforproductsandservicesotherthaninvestmentbankingservicesfromSamsungSDI.

Withinthelast12months,MorganStanleyhasprovidedorisprovidinginvestmentbankingservicesto,orhasaninvestmentbankingclientrelationshipwith,thefollowingcompany:EcoproBM,HDHyundaiElectricCoLtd,L&FCoLtd,LGDisplay,LGElectronics,SamsungElectronics,SamsungSDI,SCREENHoldings,SKhynix.

Withinthelast12months,MorganStanleyhaseitherprovidedorisprovidingnon-investmentbanking,securities-relatedservicestoand/orinthepasthasenteredintoanagreementtoprovideservicesorhasaclientrelationshipwiththefollowingcompany:SamsungSDI.

TheequityresearchanalystsorstrategistsprincipallyresponsibleforthepreparationofMorganStanleyResearchhavereceivedcompensationbaseduponvariousfactors,includingqualityofresearch,investorclientfeedback,stockpicking,competitivefactors,firmrevenuesandoverallinvestmentbankingrevenues.EquityResearchanalysts'orstrategists'compensationisnotlinkedtoinvestmentbankingorcapitalmarketstransactionsperformedbyMorganStanleyortheprofitabilityorrevenuesofparticulartradingdesks.

MorganStanleyanditsaffiliatesdobusinessthatrelatestocompanies/instrumentscoveredinMorganStanleyResearch,includingmarketmaking,providingliquidity,fundmanagement,commercialbanking,extensionofcredit,investmentservicesandinvestmentbanking.MorganStanleysellstoandbuysfromcustomersthesecurities/instrumentsofcompaniescoveredinMorganStanleyResearchonaprincipalbasis.MorganStanleymayhaveapositioninthedebtoftheCompanyorinstrumentsdiscussedinthisreport.MorganStanleytradesormaytradeasprincipalinthedebtsecurities(orinrelatedderivatives)thatarethesubjectofthedebtresearchreport.

Certaindisclosureslistedabovearealsoforcompliancewithapplicableregulationsinnon-USjurisdictions.

Morganstanley

RESEARCH

Foundation

12

STOCKRATINGS

MorganStanleyusesarelativeratingsystemusingtermssuchasOverweight,Equal-weight,Not-RatedorUnderweight(seedefinitionsbelow).MorganStanleydoesnotassignratingsofBuy,HoldorSelltothestockswecover.Overweight,Equal-weight,Not-RatedandUnderweightarenottheequivalentofbuy,holdandsell.InvestorsshouldcarefullyreadthedefinitionsofallratingsusedinMorganStanleyResearch.Inaddition,sinceMorganStanleyResearchcontainsmorecompleteinformationconcerningtheanalyst'sviews,investorsshouldcarefullyreadMorganStanleyResearch,initsentirety,andnotinferthecontentsfromtheratingalone.Inanycase,ratings(orresearch)shouldnotbeusedorrelieduponasinvestmentadvice.Aninvestor'sdecisiontobuyorsellastockshoulddependonindividualcircumstances(suchastheinvestor'sexistingholdings)andotherconsiderations.

GlobalStockRatingsDistribution

(asofSeptember30,2025)

TheStockRatingsdescribedbelowapplytoMorganStanley'sFundamentalEquityResearchanddonotapplytoDebtResearchproducedbytheFirm.

Fordisclosurepurposesonly(inaccordancewithFINRArequirements),weincludethecategoryheadingsofBuy,Hold,andSellalongsideourratingsofOverweight,Equal-weight,Not-RatedandUnderweight.MorganStanleydoesnotassignratingsofBuy,HoldorSelltothestockswecover.Overweight,Equal-weight,Not-RatedandUnderweightarenottheequivalentofbuy,hold,andsellbutrepresentrecommendedrelativeweightings(seedefinitionsbelow).Tosatisfyregulatoryrequirements,wecorrespondOverweight,ourmostpositivestockrating,withabuyrecommendation;wecorrespondEqual-weightandNot-RatedtoholdandUnderweighttosellrecommendations,respectively.

CoverageUniverseInvestmentBankingClients(IBC)OtherMaterialInvestmentServicesClients(MISC)

StockRatingCategoryCount%ofTotalCount%ofTotalIBC%ofRatingCategoryCount%ofTotalOtherMISC

Overweight/Buy149941%38946%26%70241%

Equal-weight/Hold161844%37544%23%78245%

Not-Rated/Hold40%10%25%10%

Underweight/Sell57716%8810%15%23414%

Total3,6988531719

DataincludecommonstockandADRscurrentlyassignedratings.InvestmentBankingClientsarecompaniesfromwhomMorganStanleyreceivedinvestmentbankingcompensationinthelast12months.Duetoroundingoffofdecimals,thepercentagesprovidedinthe"%oftotal"columnmaynotadduptoexactly100percent.

AnalystStockRatings

Overweight(O).Thestock'stotalreturnisexpectedtoexceedtheaveragetotalreturnoftheanalyst'sindustry(orindustryteam's)coverageuniverse,onarisk-adjustedbasis,overthenext12-18months.

Equal-weight(E).Thestock'stotalreturnisexpectedtobeinlinewiththeaveragetotalreturnoftheanalyst'sindustry(orindustryteam's)coverageuniverse,onarisk-adjustedbasis,overthenext12-18months.

Not-Rated(NR).Currentlytheanalystdoesnothaveadequateconvictionaboutthestock'stotalreturnrelativetotheaveragetotalreturnoftheanalyst'sindustry(orindustryteam's)coverageuniverse,onarisk-adjustedbasis,overthenext12-18months.Underweight(U).Thestock'stotalreturnisexpectedtobebelowtheaveragetotalreturnoftheanalyst'sindustry(orindustryteam's)coverageuniverse,onarisk-adjustedbasis,overthenext12-18months.

Unlessotherwisespecified,thetimeframeforpricetargetsincludedinMorganStanleyResearchis12to18months.

AnalystIndustryViews

Attractive(A):Theanalystexpectstheperformanceofhisorherindustrycoverageuniverseoverthenext12-18monthstobeattractivevs.therelevantbroadmarketbenchmark,asindicatedbelow.

In-Line(I):Theanalystexpectstheperformanceofhisorherindustrycoverageuniverseoverthenext12-18monthstobeinlinewiththerelevantbroadmarketbenchmark,asindicatedbelow.

Cautious(C):Theanalystviewstheperformanceofhisorherindustrycoverageuniverseoverthenext12-18monthswithcautionvs.therelevantbroadmarketbenchmark,asindicatedbelow.

Benchmarksforeachregionareasfollows:NorthAmerica-S&P500;LatinAmerica-relevantMSCIcountryindexorMSCILatinAmericaIndex;Europe-MSCIEurope;Japan-TOPIX;Asia-relevantMSCIcountryindexorMSCIsub-regionalindexorMSCIACAsiaPacificexJapanIndex.

StockPrice,PriceTargetandRatingHistory(SeeRatingDefinitions)

Morganstanley

RESEARCH

Foundation

MorganStanleyResearch13

ImportantDisclosuresforMorganStanleySmithBarneyLLCCustomers

ImportantdisclosuresregardingtherelationshipbetweenthecompaniesthatarethesubjectofMorganStanleyResearchandMorganStanleySmithBarneyLLCorMorganStanleyoranyoftheiraffiliates)areavailableontheMorganStanleyWealth

Morganstanley

RESEARCH

Foundation

14

Managementdisclosurewebsiteat/online/researchdisclosures.ForMorganStanleyspecificdisclosures,youmayreferto

/researchdisclosures

.

EachMorganStanleyresearchreportisreviewedandapprovedonbehalfofMorganStanleySmithBarneyLLC.ThisreviewandapprovalisconductedbythesamepersonwhoreviewstheresearchreportonbehalfofMorganStanley.Thiscouldcreateaconflictofinterest.

OtherImportantDisclosures

MorganStanleyResearchpolicyistoupdateresearchreportsasandwhentheResearchAnalystandResearchManagementdeemappropriate,basedondevelopmentswiththeissuer,thesector,orthemarketthatmayhaveamaterialimpactontheresearchviewsoropinionsstatedtherein.Inaddition,certainResearchpublicationsareintendedtobeupdatedonaregularperiodicbasis(weekly/monthly/quarterly/annual)andwillordinarilybeupdatedwiththatfrequency,unlesstheResearchAnalystandResearchManagementdeterminethatadifferent