Sumco is the second-largest semiconductor-grade silicon wafer manufacturer in the world, with around a 20% market share. Its main sites are in Japan, with smaller ones in Indonesia and the US. We believe the company has become too conservative in expansion after being devastated by previous overexpansion before the global financial crisis of 2007-09. Hence, we foresee Sumco’s five-year sales CAGR to be 8.4%, slightly underperforming the semiconductor silicon wafer market due to market share loss to GlobalWafers and new Chinese entrants. Like other semiconductor companies, Sumco benefits from demand growth in data centers, artificial intelligence, and automotive electronics.