Investing.com-- Tokyo Electron Ltd. (TYO:8035) shares rose sharply on Friday after the Japanese chipmaking equipment maker forecast above-consensus earnings for the first half of the fiscal year, thanks to outsized AI-fueled demand.

Tokyo Electron rose as much as 8.6% to 48,190.0 yen, and was among the best performers on the Nikkei 225 index, which added 0.6%.

The semiconductor equipment maker forecast net sales of 1.57 trillion yen ($1 billion) for the first six months of the fiscal year to March 31, 2027– representing a 33% year-on-year increase and above market expectations of 1.42 trillion yen.

Operating income was forecast at 431.0 billion yen, up 42.2% and above market estimates of 405.9 billion yen.

The bumper outlook– which comes amid increasing AI-driven demand for chips and chipmaking equipment– largely overshadowed middling fiscal 2026 earnings from Tokyo Electron.

The company’s net sales were flat year-on-year at 2.44 trillion yen, while operating income fell 10.4% to 624.94 billion yen.

But the company stands to benefit greatly from its biggest customers all outlining plans to increase their chipmaking capacities in the coming months.

Chipmaking giants TSMC (NYSE: TSM),Samsung Electronics Co Ltd (KS:005930), Intel Corporation (NASDAQ: INTC), SK Hynix Inc (KS:000660), and Micron Technology Inc (NASDAQ: MU)– which represent roughly 55% of Tokyo Electron’s revenue– have all signaled plans to ramp up capacity in the coming quarters to meet outsized chip demand from the AI industry.

Tokyo Electron is a key component of the chipmaking industry, given that it manufactures machines used to fabricate integrated circuits, a key process in chipmaking.