Sumitomo Bakelite Company Limited

Business Details

Core products include Epoxy Resin Molding Materials for Semiconductor Encapsulation, Photosensitive Materials for Semiconductors, Bonding Paste for Semiconductors, and the LαZ® Series Semiconductor Substrate Materials. The segment operates globally, centered on China, Taiwan, and Southeast Asia, capturing robust demand for AI-related, power semiconductor, and memory applications. In FY2026 (ending March 2026), revenue was ¥106,396 million, accounting for approximately 33% of total company sales, and the segment's business profit margin of 19.5% is the highest among all segments, making it a highly profitable segment.

Recent Overview

Revenue grew 16.5% year-on-year and business profit grew 15.2%, driven by AI- and China-related demand, marking the highest growth among all segments

In FY2026 (ending March 2026), revenue was ¥106,396 million (up 16.5% year-on-year), and business profit was ¥20,714 million (up 15.2% year-on-year). Epoxy resin molding materials for semiconductor encapsulation benefited from continued robust demand in China and expanded AI-related applications. Photosensitive materials for semiconductors saw progress from the memory market recovery and expanded sales for power semiconductors. Bonding paste for semiconductors continued to see strong domestic demand in China and sustained demand for high-density packaging in Southeast Asia. The LαZ® series expanded adoption in power devices for AI servers, and also grew in mobile applications. Segment assets expanded to ¥168,549 million, up ¥33,636 million year-on-year.

Key Products

Growth Drivers

• Continued robust semiconductor demand in China and expansion of AI-related applications
• Recovery in the memory market and expanded new adoption in non-memory applications for power semiconductors
• Expanded adoption of the LαZ® series in power devices for AI servers and sales growth for mobile devices
• Increased demand for bonding paste for high-density packaging in Southeast Asia
• Improved profit structure through focus on sales of high-value-added products and appropriate pricing
• Optimization of the supply system through utilization of the new plant in China and new line in Taiwan

Risks

• Geopolitical risk: high dependence on sales to China and Taiwan, with potential impact from US-China friction and Taiwan Strait risk
• Semiconductor market volatility: risk of sales fluctuation due to demand cycles in memory and logic semiconductors
• Risk of profit pressure from rising labor costs, mainly at overseas locations
• Risk of impact on the supply chain and customer demand from changes in trade policy such as US tariff policy
• Risk of sharp demand decline due to a shift in the AI-related investment cycle
• Risk of deteriorating asset efficiency due to the rapid expansion of segment assets (up 24.9% year-on-year)