TOKYO OHKA KOGYO CO., LTD.

Business Details

The Tokyo Ohka Kogyo Group's core businesses are the manufacture and sale of electronic functional materials, centered on photoresists, and high-purity chemicals. Its major customers are leading-edge semiconductor manufacturers, headed by TSMC (33.6% of net sales), and it operates in global markets including Taiwan, China, South Korea, the United States, and Japan. Aiming to be the No.1 global share holder in leading-edge resists, the company develops and supplies products with microfabrication technology and high-purification technology as its core competencies. micro resist technology GmbH was newly consolidated from 1Q FY2026.

Recent Overview

1Q net sales and operating profit both increased substantially on tailwinds from generative AI demand and yen depreciation; full-year forecast maintained

In the first quarter of the fiscal year ending December 2026 (January to March 2026), net sales were ¥67,077 million (up 23.6% year on year) and operating profit was ¥15,074 million (up 53.8% year on year), representing substantial increases in both sales and profit. This was driven by generative AI-related demand exceeding initial expectations, as well as the yen depreciating more than expected. While smartphone demand remained sluggish, overall semiconductor demand exceeded the same period of the previous year. Some of the quantitative targets in the medium-term management plan "tok Medium-Term Plan 2027" were revised. micro resist technology GmbH was newly consolidated. The full-year earnings forecast (net sales of ¥261,000 million, operating profit of ¥52,200 million) was left unchanged.

Key Products

Growth Drivers

• Continued expansion of demand for leading-edge semiconductors for generative AI-related data centers (1Q results exceeded initial expectations)
• Increased demand due to the start of operations at new plants by major customers such as TSMC
• Improved profitability through an increased sales ratio of high-value-added products (leading-edge resists)
• Expanded supply capacity through strategic capital investment, including the new photoresist manufacturing building at the Koriyama Plant and the new high-purity chemicals manufacturing building in Pyeongtaek, South Korea
• Expansion of the customer base in the European market and strengthening of the product portfolio through the wholly-owned subsidiarization of micro resist technology GmbH
• Boosting effect on yen-denominated net sales and profit from the progression of yen depreciation

Risks

• Risk of stagnation in the consumer semiconductor market due to continued sluggish smartphone demand
• Impact on business performance from foreign exchange fluctuations (the forecast for the fiscal year ending December 2026 assumes ¥150/US$)
• Risk of deteriorating profitability due to raw material price fluctuations and downward pressure on selling prices
• Risk of shortened product life cycles and rising R&D costs due to accelerating technological innovation
• Risks from changes in laws and regulations in various countries and geopolitical risks associated with overseas business expansion
• Product liability risk from product defects (losses in cases not fully covered by insurance)
• Risk of fluctuations in generative AI-related demand (downside risk if demand exceeding initial expectations does not continue)