MITACHI CO., LTD.

Business Details

This is the core segment of the Mitachi Sangyo Group, handling the domestic procurement and sale of semiconductors and electronic components as well as assembly processing sales. Its main customers span a wide range of fields including automotive (car electronics), consumer equipment, industrial equipment, and amusement equipment. The business is centered on the company itself and ME Tech Co., Ltd. In FY2026 (ending May 2026), growth in semiconductor sales to automotive parts manufacturers and increased sales in the amusement field drove performance, with this segment accounting for approximately 85.1% of consolidated net sales (on an external customer sales basis), remaining overwhelmingly the primary segment.

Recent Overview

Driven by automotive semiconductors and the amusement field, sales continued to grow, up 24.5% year on year

In FY2026 (ending May 2026), the Domestic Business Division achieved external customer sales of ¥102,391 million (up 24.5% year on year) and segment profit of ¥2,512 million (up 16.0% year on year), driven by the expansion of semiconductor sales to automotive parts manufacturers and steady performance in the amusement field (gaming machine-related). Sales to the Denso Group expanded significantly to ¥77,773 million from ¥58,849 million in the prior period. On the other hand, the profit margin declined slightly to a segment profit margin of 2.4% from 2.6% in the prior period. Note that for FY2027 (ending May 2027), a decline in sales is expected due to a decrease in some semiconductor sales in the automotive field.

Key Products

Growth Drivers

• Continued expansion of semiconductor sales to automotive parts manufacturers within the Denso Group (¥77,773 million in FY2026 (ending May 2026), up 32.1% year on year)
• Steady sales performance in the amusement field (gaming machine-related)
• Continued expansion of demand for semiconductors and electronic components for car electronics amid the electrification and advancement of electronic control in automobiles
• Expectations of increased orders in the industrial equipment field against the backdrop of the expanding AI-related market
• Strengthened initiatives in the mobility and industrial equipment fields based on the Medium-Term Management Plan 2026

Risks

• Risk of sales concentration in the Denso Group (dependence on a single customer accounting for approximately 75.9% of external customer sales in FY2026 (ending May 2026))
• Expected decline in sales in FY2027 (ending May 2027) due to a decrease in some semiconductor sales in the automotive field
• Risk of fluctuations in demand for semiconductors and electronic components due to changes in the automotive industry (such as the shift to electrification)
• Impact on the supply chain and demand from U.S. trade policy trends and geopolitical risks
• Inventory risk associated with an increase in inventory assets (¥20,327 million at the end of FY2026 (ending May 2026), up 14.7% year on year)

Business Details

The Overseas Business Division is centered on EMS (Electronics Manufacturing Services) mainly through M.A.TECHNOLOGY,INC. in the Philippines, along with the procurement and sale of semiconductors and electronic components at bases in Hong Kong, Taiwan, China, Thailand, Indonesia, Malaysia, and the U.S. Its main customers are overseas manufacturers in the automotive, consumer, and industrial equipment fields, with assembly processing sales of electronic devices and unit products serving as a pillar of earnings. In FY2026 (ending May 2026), this segment accounted for approximately 14.9% (¥17,937 million) of consolidated net sales.

Recent Overview

Steady performance in automotive and other fields led to a significant 50.7% year-on-year increase in segment profit

In FY2026 (ending May 2026), the Overseas Business Division saw steady sales performance in the automotive field and other fields, resulting in external customer sales of ¥17,937 million (up 12.8% year on year). Segment profit improved significantly to ¥903 million (up 50.7% year on year), and the profit margin also rose from 3.8% to 5.0%. Segment assets expanded to ¥10,100 million (up 13.1% year on year). By region, sales to Japan were ¥104,305 million, sales to the Philippines were ¥6,086 million, and sales to China were ¥5,260 million.

Key Products

Growth Drivers

• Steady overseas sales performance in the automotive field and other fields (up 12.8% year on year in FY2026 (ending May 2026))
• Expansion of demand for semiconductors and electronic components accompanying the electrification and advancement of electronic control in automobiles
• Utilization of a global network through seven bases in Asia (Hong Kong, Taiwan, China, Thailand, Indonesia, Malaysia, and the Philippines) and a U.S. base
• Expectations of increased orders in the industrial equipment field against the backdrop of the expanding AI-related market and progress in DX
• Promotion of the strategies of "strengthening and expanding the core business" and "generating earnings in new fields" under the Medium-Term Management Plan 2026
• Contribution to net assets from improvement in foreign currency translation adjustments (from ¥1,301 million at the end of the prior period to ¥1,931 million at the end of the current period)

Risks

• Risk of declining demand due to geopolitical risks (prolonged situations in the Middle East and Ukraine)
• Impact on procurement and sales from fluctuations in U.S. trade policy (tariffs, export restrictions, etc.) (the FY2027 (ending May 2027) forecast assumes an exchange rate of ¥150 to the dollar)
• Foreign exchange risk (overseas base earnings fluctuate when converted into yen): a foreign exchange loss of ¥46 million was recorded in FY2026 (ending May 2026)
• Risk of declining demand for China due to the continued slump in the Chinese real estate market (sales to China: ¥5,260 million)
• Risk of rising labor costs and labor management issues at overseas bases
• Risk of declining sales of some semiconductors in the automotive field (the FY2027 (ending May 2027) forecast anticipates a decline in sales in the automotive field)