ASAHI YUKIZAI CORPORATION

Business Details

This segment manufactures and sells synthetic resin piping materials such as PVC, and designs and constructs piping works. In addition to core products such as resin valves, it operates the Engineering Services business (design and construction using resin piping materials) and offers Diamatrix Products for semiconductor manufacturing equipment. It provides corrosion-resistant solutions to manufacturers in the semiconductor, electronics, chemical, and non-ferrous metals industries domestically and overseas, with sales and manufacturing bases in the US, China, Europe, and Asia Pacific. This is the largest segment, accounting for approximately 60% of consolidated net sales.

Recent Overview

Both sales and profit declined significantly due to delayed recovery in US and domestic demand combined with rising fixed costs

In FY2026 (ending March 2026), the Piping Systems Business posted net sales of ¥48,117 million (down 8.0% year on year) and operating income of ¥6,285 million (down 30.6% year on year), a significant decline in both sales and profit. This was due to a combination of continued reconsideration and postponement of semiconductor plant construction projects in the US, postponement and reconsideration of capital expenditure for the electronics industry in China, and a delayed recovery in domestic capital expenditure and plant construction demand. The Engineering Services business saw a decrease in sales due to the reversal of large-scale semiconductor-related orders received in the prior year. On the other hand, Diamatrix Products saw an increase in sales due to capturing demand from Chinese local manufacturers and signs of demand recovery in Japan and South Korea. Increases in fixed costs such as labor costs also pressured the operating margin, which fell from 17.3% to 13.1%.

Key Products

Growth Drivers

• Expanding demand for Diamatrix Products for semiconductor manufacturing equipment due to improving demand for advanced semiconductors driven by the expansion of AI data centers
• Broadening base of demand for related piping and engineering services as semiconductor plant construction demand in the US enters a recovery phase
• Steady trend in equipment installation and piping construction demand accompanying capital expenditure for newly constructed semiconductor plants
• Continued capture of growing demand for Diamatrix Products from Chinese local manufacturers
• Development of strategic products such as large-diameter butterfly valves for seawater desalination facilities in the Middle East and Africa regions
• Technological innovation toward lower particle levels for Diamatrix Products and strengthening of the supply system

Risks

• Risk of recurrence of reconsideration or postponement of semiconductor plant construction projects due to uncertainty surrounding US trade policy (tariffs)
• Prolonged sluggish domestic demand in China and stagnation of capital expenditure for the electronics industry
• Structural deterioration of profit margins due to increases in fixed costs such as labor costs and depreciation (operating margin declined from 17.3% to 13.1% in FY2026 (ending March 2026))
• Sluggish demand for core products due to a leveling off of domestic capital expenditure and plant construction demand
• Period-to-period fluctuations in sales due to variability in orders for large-scale semiconductor-related engineering projects
• Impact on construction progress from rising raw material prices and material supply constraints associated with geopolitical risks