T&S Group Inc.

Business Details

T&S Group operates system development and its related services in a single segment. The business is composed of three categories: DX Solutions (information system development and IT services for heavy electrical equipment, social infrastructure, and business systems, mainly for major corporate clients), Semiconductor Solutions (development, maintenance, and operation of in-factory systems for semiconductor-related companies), and AI Solutions (contracted development and R&D support utilizing advanced technologies such as AI, image recognition, and hardware control). The company maintains no-debt management, with a high level of financial soundness reflected in an equity ratio of 82.4% (as of the end of the first half of FY2026 (ending September 2026)).

Recent Overview

In the first half of FY2026 (ending September 2026), sales and all profit items achieved double-digit growth, led by Semiconductor Solutions

In the first half of FY2026 (ending September 2026) (October 2025 to March 2026), the company achieved double-digit growth across all items, with sales of ¥2,254 million (up 11.8% year on year), operating profit of ¥425 million (up 14.9%), and profit attributable to owners of parent for the first half of ¥282 million (up 16.5%). The Semiconductor Solutions category, up sharply 28.6% year on year, led overall growth. DX Solutions was also solid, up 8.0%. AI Solutions declined 12.7% due to a focus on R&D activities. There is no change to the full-year earnings forecast (sales of ¥4,500 million, operating profit of ¥800 million). The company acquired 90,200 shares of treasury stock (acquisition value of ¥125 million) and implemented shareholder returns.

Key Products

Growth Drivers

• Increased orders for large-scale development projects in the Semiconductor Solutions category, driven by a recovery in the semiconductor market and robust domestic semiconductor investment demand (sales in the first half of FY2026 (ending September 2026) up 28.6% year on year)
• Expanded orders from new clients due to the consolidation effect of subsidiaries (such as Extage Corporation) joining the group (DX Solutions category up 8.0% year on year)
• Increasing inquiries related to generative AI and edge AI amid rising AI demand (the AI Solutions category is expected to shift to a monetization phase following R&D investment)
• Expansion of engineer scale and deepening of transactions with existing clients based on the long-term vision "T&S Growth Journey 2031"
• Financial stability underpinned by no-debt management and a high equity ratio (82.4%), providing room for growth through M&A and business alliances

Risks

• High dependence on sales to a specific customer (Kioxia Corporation) (17.8% of sales in FY2025 (ended September 2025) actual), creating a risk that fluctuations in the customer's investment plans directly affect business performance
• Risk of difficulty in hiring engineers and rising labor costs due to the worsening shortage of IT personnel (Ministry of Economy, Trade and Industry estimates a shortage of up to 790,000 by 2030)
• Risk of fluctuations in the semiconductor cycle (fluctuations between boom and slump due to supply-demand balance affecting orders in the Semiconductor Solutions category)
• Suppression of IT investment by client companies due to macroeconomic risks such as U.S. trade policy and rising prices (the impact of U.S. trade policy is explicitly noted in the earnings report)
• Risk of short-term earnings volatility due to concentrated R&D investment in the AI Solutions category (down 12.7% year on year in the first half of FY2026 (ending September 2026))