In the cyclical sector, we increased our positions in dicing-blade manufacturer Disco (TSE:6146, Financial) and electronic components maker Murata Manufacturing. Disco commands a 70% global market share in dicing-blade equipment, to cut everything from wafers to LEDs to power semiconductors. The added value on a single wafer continues to increase and semiconductor companies prefer no mistakes during the back-end process. Disco works with end clients on new product development, which we find builds a compelling economic moat.
From Matthews Japan Fund (Trades, Portfolio)'s third-quarter 2019 commentary.
