Several Japanese companies are major players in the global AI supply chain, occupying essential roles in the manufacturing of specialized semiconductor equipment, materials and advanced robotics, says Fidelity Portfolio Manager Masaki Nakamura, who considers them among the most attractive investment opportunities in Japan.
“I am emphasizing Japanese companies that are leaders in providing foundational materials and packaging-related technologies that help fuel innovation in the semiconductor industry, a key component of the AI supply chain,” says Nakamura, who manages Fidelity® Japan Smaller Companies Fund (FJSCX). “I believe several of them have the potential for outsized growth for an extended period.”
In helming the country-focused equity strategy, Nakamura focuses on Japanese small- and mid-cap companies that he believes have unique catalysts to drive long-term growth that is not fully appreciated by the market. His approach is centered on exploiting mispriced stocks in Japan's SMID-cap universe, where a large percentage of companies lack sell-side analyst coverage.
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Recently, his research has highlighted advanced packaging as one of the fastest-growing areas in semiconductor manufacturing. He explains that advanced semiconductor packaging encompasses a range of manufacturing processes used to interconnect multiple computer chips into a single, high-performance package, boosting computing power while reducing energy consumption.
He sees several of the fund’s investments as well-positioned amid these trends, including Resonac Holdings, a global leader in materials used for wafer fabrication and packaging in the semiconductor production process.
Nakamura also points to two chemical companies: Toyo Gosei and Tokyo Ohka Kogyo, which are leveraged to growing demand from advanced semiconductor manufacturing processes, such as extreme ultraviolet (EUV) lithography.
Additionally, he cites Renesas Electronics, a supplier of embedded semiconductors that serve as the digital “brains” and power regulators across a broad range of connected devices.
“I consider all of these to be well-managed companies with disciplined capital allocation and attractive long-term growth potential,” he concludes.
For specific fund information, including full holdings, please click on the fund trading symbol above. Securities mentioned were fund holdings as of May 31, 2026.
Masaki Nakamura is a research analyst and portfolio manager in the Equity division at Fidelity Investments.
In this role, Mr. Nakamura manages Fidelity Japan Smaller Companies Fund. Additionally, he performs widespread fundamental research on Japanese small cap companies.
Prior to joining Fidelity in 2010, Mr. Nakamura was an assistant vice president at BlackRock in their global equity team and an assistant vice president at Merrill Lynch Investment Managers. He has been in the financial industry since 2002.
Mr. Nakamura earned his Bachelor of Arts in economics from Keio University and his Master of Business Administration in finance and strategy from The Wharton School of the University of Pennsylvania.