SUMCO CORPORATION

Business Details

The Group consists of a single segment, the High-Purity Silicon Business. Its main products are semiconductor silicon wafers of 300mm and Silicon Wafers 200mm and Below (300mm Polished Wafer, 300mm Epitaxial Wafer, etc.). Its customers are semiconductor manufacturers in Japan and overseas, and it has manufacturing sites in Saga, Yamagata, Nagasaki, Taiwan, and other locations. While demand for 300mm leading-edge products remains strong on the back of AI and data center demand, demand for final products using Silicon Wafers 200mm and Below continues to stagnate.

Recent Overview

In Q1 2026, revenue declined slightly and the company fell into an operating loss, with a sharp rise in depreciation and amortization weighing on profitability

Revenue for Q1 (January-March) of FY2026 (ending December 2026) was ¥101,402 million (down 1.0% year on year), a slight decline, but cost of sales expanded to ¥92,944 million (compared to ¥83,462 million in the same period of the prior year), causing gross profit to fall sharply to ¥8,457 million. The company recorded an operating loss of ¥5,273 million, an ordinary loss of ¥7,965 million, and a net loss of ¥8,469 million, falling into losses at every profit stage. Depreciation and amortization increased significantly to ¥30,812 million (compared to ¥22,788 million in the same period of the prior year), putting pressure on profitability. While demand for 300mm leading-edge products remains strong, inventory adjustments for non-leading-edge products continue, along with ongoing weakness in Silicon Wafers 200mm and Below. The Q2 cumulative forecast calls for revenue of ¥213,400 million (up 3.9% year on year) but an operating loss of -¥7,700 million. The exchange rate assumption for Q2 (April-June) is ¥160 to the US dollar.

Key Products

Growth Drivers

• Continued expansion of demand for leading-edge logic and DRAM/NAND for AI data centers (increased demand for NAND applications is expected in Q2 as well)
• Technology development and product differentiation to maintain a high market share in 300mm leading-edge products
• Strengthening the ability to respond to demand for leading-edge products through the sophistication of manufacturing equipment (promotion of business structural reform)
• Strengthening cost competitiveness through productivity improvements using AI
• Efficiency and profitability improvements through the restructuring of the production system for Silicon Wafers 200mm and Below

Risks

• Pressure on profitability from a sharp increase in depreciation and amortization associated with large-scale capital investment for leading-edge 300mm products (Q1 actual of ¥30,812 million, up 35.2% year on year)
• Cost burden associated with continued weak demand for Silicon Wafers 200mm and Below and the restructuring of the production system
• Risk of prolonged customer inventory adjustments for non-leading-edge products
• Impact of geopolitical risks and various countries' semiconductor policies (tariffs, etc.) on demand for final products
• Risk related to the situation in the Middle East (currently explained as having limited direct impact)
• Foreign exchange risk (Q2 forecast assumption: ¥160 to the US dollar)
• Risk of revenue concentration with Sumitomo Corporation (27.0% of revenue, ¥110,600 million in the prior fiscal year actual)
• Financial burden from an increase in long-term borrowings (¥330,107 million at the end of Q1, up ¥17,907 million from the end of the prior fiscal year)