Tri Chemical Laboratories Inc.

Business Details

The Tri Chemical Laboratories Group develops, manufactures, and sells high-purity chemical compounds used in semiconductor wafer processes (CVD, dry etching, and diffusion). Major customers include TOPCO Scientific, Nippon Air Liquide, and Changxin Xinqiao Memory Technologies. The Group operates a four-hub East Asian structure spanning Japan (Minami Alps Plant), Taiwan (Sanka Electronic Materials), South Korea (SK Tri Chem, an equity-method affiliate), and China (Shanghai Special Li Chemical and An De Tuo Hua), supplying primarily to advanced logic and memory customers.

Recent Overview

In Q1 FY2027 (ending January 2027), net sales, operating profit, ordinary profit, and net profit all increased substantially

In Q1 FY2027 (ending January 2027) (February to April 2026), net sales were ¥7,489 million (up 14.0% year-on-year), operating profit was ¥2,069 million (up 20.8%), ordinary profit was ¥2,485 million (up 51.5%), and net profit attributable to owners of parent was ¥1,855 million (up 53.6%), representing substantial profit growth at every income level. The large increase in ordinary profit was mainly attributable to the recognition of ¥295 million in equity-method investment profit related to the Korean affiliate SK Tri Chem Co., Ltd., and the absence of the ¥336 million foreign exchange loss recorded in the same period of the prior year. By region, sales to Taiwan expanded substantially to ¥2,460 million (versus ¥1,705 million in the same period of the prior year). By product, CVD Materials (Metal) grew approximately 45% to ¥1,676 million (versus ¥1,152 million in the same period of the prior year). Capital expenditure increased substantially to ¥2,423 million (versus ¥795 million in the same period of the prior year), accelerating the buildout of production capacity at the Minami Alps Plant and other facilities. The full-year earnings forecast remains unchanged from the figures announced on March 13, 2026.

Key Products

Growth Drivers

• Increasing demand for semiconductor manufacturing chemical materials for advanced logic and memory applications, driven by expanding data center investment amid the spread of generative AI
• Temporary increase in demand from some Chinese customers due to inventory stockpiling in preparation for geopolitical risk
• Substantial expansion of sales to Taiwan (up approximately 44% year-on-year), contributing to regional diversification and growth
• Improved product mix, including rapid expansion of CVD Materials (Metal) (up approximately 45% year-on-year)
• Construction of a mass-production system and capacity expansion for new etching materials at the Minami Alps Plant (¥2,423 million in tangible fixed asset acquisitions in Q1)
• Expansion of production capacity at the Tongluo plant of Taiwanese subsidiary Sanka Electronic Materials Co., Ltd.
• Full-scale entry into the Chinese market through the plant startup of Chinese joint venture An De Tuo Hua (Anhui) Electronic Materials Co., Ltd.
• Strengthened synergies with Korean affiliate SK Tri Chem Co., Ltd. and contribution from equity-method investment profit
• Response to rising cost pressures and profitability improvement through sales price revisions

Risks

• Risk of declining demand in the Chinese market due to customers' production efficiency improvements and tightening regulations on China (risk of a rebound decline once the temporary demand increase from inventory stockpiling subsides)
• Risk of rising manufacturing costs due to fluctuations in raw material and energy prices
• Risk of increased import costs due to foreign exchange fluctuations (particularly yen depreciation)
• Impact on the global economy and semiconductor market from changes in US trade and tariff policy
• Geopolitical risk (country risk associated with business operations in Taiwan, South Korea, and China)
• Risk of deteriorating performance at equity-method affiliate SK Tri Chem Co., Ltd. (full-year ordinary profit and net profit are forecast to decline)
• Risk of declining profit margins due to increased depreciation and amortization expenses from large-scale capital investments such as at the Minami Alps Plant (Q1 depreciation and amortization of ¥605 million, up 48% year-on-year)
• Risk of sales concentration among three major customers: TOPCO Scientific, Nippon Air Liquide, and Changxin Xinqiao
• Full-year forecast for ordinary profit and net profit anticipates a decline versus the prior fiscal year's actual results (ordinary profit of ¥6,300 million, down 11.1% from the prior year's ¥7,090 million)