Morgan Stanley has identified five Japanese electronics manufacturers as preferred holdings for exposure to artificial-intelligence infrastructure spending and structural improvements in the sector. All five stocks are rated Overweight.
The top pick is Murata Manufacturing, highlighted for its dominant position in multilayer ceramic capacitors that serve AI data-center and broader capex demand. Analysts expect margin expansion as the company shifts production toward higher-value-added capacitors amid rising utilization. The firm’s RF modules segment is also turning a corner after years of underperformance, while a structurally lower cost base versus Korean and Taiwanese peers is reinforced by a weak yen.
Ibiden is presented as a pure-play bet on AI infrastructure buildout. The company is expected to maintain near-monopoly share in advanced ABF package substrates for NVIDIA’s GPU roadmap, with technological leadership that rivals are unlikely to replicate as newer chip generations require larger, more complex substrates. Morgan Stanley sees a higher probability of upside to Ibiden’s fiscal 2031 guidance, following first-quarter fiscal 2026 results that beat analyst forecasts for both revenue and earnings and an upward revision to full-year guidance.
TDK is characterized as a portfolio in transition, prioritizing capital discipline and business-mix improvement. The company is exiting or divesting legacy, lower-return segments such as HDD heads and certain passive components, while the rechargeable battery division—particularly higher-value silicon-anode and data-center backup applications—is emerging as the primary earnings driver. TDK reported record first-quarter results for fiscal 2027, driven by strong demand from AI data centers and smartphones.
Hirose Electric is positioned for steady, high-margin compounding. Growth is supported by connectors for general industrial equipment and AI server infrastructure, with margin durability underpinned by a semi-fabless model and disciplined execution.
Niterra combines diversification with market-share gains. Its legacy businesses in spark plugs and exhaust gas sensors provide a stable cash base, while newer electrostatic chuck operations for semiconductor equipment offer a growth vector.
