Toyo Gosei Co.,Ltd.

Business Details

This business produces and sells Photosensitive Materials for Advanced Semiconductors (Photoresist Materials), Photosensitive Materials for LCD Displays, Electric Double-Layer Materials, and other products. Major customers include Shin-Etsu Chemical Co., Ltd. (net sales of ¥6,889 million in FY2026 (ending March 2026)). Against a backdrop of expanding demand related to generative AI, sales of materials for advanced semiconductors have increased, and the company is actively pursuing capacity expansion investments under its medium-term management plan, "Beyond500."

Recent Overview

Net sales increased, but operating income fell 46.9% year on year due to a sharp rise in fixed costs

In the Photosensitive Materials Business for FY2026 (ending March 2026), net sales increased to ¥26,417 million (up ¥2,544 million, or +10.7%, year on year), driven by higher sales of advanced photoresist materials for AI applications. On the other hand, depreciation and amortization surged to ¥3,966 million (up ¥1,261 million year on year) due to the start of operations of large-scale production facilities and a production information system, and fixed costs such as personnel expenses also increased significantly, resulting in a sharp decline in operating income to ¥1,051 million (down ¥927 million, or -46.9%, year on year). Increased sales of advanced materials in the second half of the fiscal year helped absorb part of the fixed cost burden. Sales of materials for general-purpose semiconductors declined slightly.

Key Products

Growth Drivers

• Increased sales of materials for advanced photoresists driven by expanding demand for generative AI-related semiconductor devices (demand expanded further toward the second half)
• Strengthened manufacturing technology capabilities and analytical framework, along with establishment of a stable supply system, through the photosensitive material development and analysis building and large-scale new production facility completed in 2024
• Expanded supply capacity for advanced field products through the expansion of the fourth photosensitive material plant and preparations for construction of a new photosensitive material plant
• Mid- to long-term market expansion driven by the elevation of semiconductors to a national strategic priority (economic security) in various countries and increasing data center demand
• Continued stable demand for display photosensitive materials (maintenance of panel production for smartphones and TVs at a certain level)
• Groundwork for long-term supply capacity expansion through future acquisition of business sites

Risks

• Pressure on profits from a sharp increase in depreciation and fixed costs associated with large-scale capital investment (depreciation and amortization in FY2026 (ending March 2026) was ¥3,966 million, up ¥1,261 million year on year)
• Risk of delays in improving the utilization rate of new production facilities and obtaining product qualifications
• Delayed recovery in demand for materials used in general-purpose and standard semiconductors (automotive, industrial equipment, etc.)
• Deterioration of the business environment due to geopolitical risks, including US tariff measures, and sharp exchange rate fluctuations
• Uncertainty in sales volume due to fluctuations in semiconductor market demand (customers' inventory adjustments and changes in capital expenditure plans)
• Rising manufacturing costs due to surging raw material prices and logistics costs