NHK SPRING CO., LTD.

Business Details

An automotive parts segment that manufactures and sells Coil Springs / Leaf Springs, Stabilizers, Accumulators, Torsion Bars, Stabilizer Links, and Stabilinkers. Manufacturing and sales are conducted at sites in Japan, Thailand, North America, Europe, China, India, Mexico, and elsewhere. The segment supplies key parts essential to automotive suspension systems, and is required to respond to demands for weight reduction, higher durability, and space savings.

Recent Overview

Despite lower domestic demand, price pass-through progress in Thailand and increased volume for some vehicle models drove a 56.6% year-on-year increase in operating profit

In the Suspension Springs Business for FY2026 (ending March 2026), net sales were ¥167,417 million (down 1.0% year on year) due to a decline in domestic demand. On the other hand, operating profit improved significantly to ¥727 million (up 56.6% year on year), supported by progress in passing on higher raw material and other input costs to product prices in Thailand and increased unit volume for some vehicle models. For the next fiscal year (FY2027 (ending March 2027)), further profit improvement is expected, with net sales forecast at ¥164,000 million and operating profit forecast at ¥4,000 million.

Key Products

Growth Drivers

• Progress in passing on higher raw material and other input cost increases in Thailand to product selling prices
• Recovery in sales volume driven by increased units for some vehicle models
• Advancement of selling price improvement, productivity improvement, and optimal order-taking strategy at North American sites
• Accelerated development of products supporting weight reduction, higher durability, and space savings
• Continuous profit improvement through rationalization measures

Risks

• Risk of decreased sales volume due to sluggish automobile demand in Thailand, Japan, and elsewhere
• Risk of increased fixed costs, including one-time expenses associated with the launch of new products in Mexico
• Risk of rising costs for raw materials, logistics, energy and utilities, etc.
• Difficulty in securing a stable workforce at North American sites
• Risk of global production site reorganization associated with progress in vehicle electrification (BEV adoption)
• Risk of deteriorating business environment due to trade policy reviews (tariffs, etc.) in various countries
• Risk of profit pressure from intensifying price competition

Business Details

A business segment that manufactures and sells Automotive Seats (Complete Units), Seat Mechanism Components, Interior Components, and other products. As an independent supplier, it internally handles the various processes required for seats, including metal processing, urethane, and sewing, and possesses comprehensive design and development capabilities for complete seat units. It conducts manufacturing and sales both domestically and overseas (Thailand, North America, China, etc.). It is a core segment accounting for approximately 36% of consolidated net sales.

Recent Overview

Both net sales and operating profit declined significantly year on year due to production cuts in Japan and Thailand and changes in North American vehicle/model mix

In the Seats Business for FY2026 (ending March 2026), net sales fell sharply to ¥292,561 million (down 3.7% year on year) and operating profit fell to ¥8,052 million (down 28.3% year on year), due to the impact of production cuts by Japanese automakers in Japan and Thailand, and changes in vehicle/model mix in North America. The operating profit margin declined from 3.7% in the prior year to 2.8%. For the next fiscal year (FY2027 (ending March 2027)), a recovery is expected, with net sales forecast at ¥311,000 million (up 6.3% year on year) and operating profit forecast at ¥9,000 million (up 11.8% year on year).

Key Products

Growth Drivers

• Expected recovery in the next fiscal year (FY2027 (ending March 2027)) to net sales of ¥311,000 million and operating profit of ¥9,000 million (up 6.3% and 11.8% year on year, respectively)
• Continued efforts to pass on increases in raw material and logistics costs to selling prices
• Continued profitability improvement through ongoing rationalization measures
• Increased added value through development of lightweight, high-function seats supporting electrification and autonomous driving
• Progress in passing on higher raw material and other input costs to product selling prices in Thailand

Risks

• Risk of downside to sales and profit due to production cuts by Japanese automakers in Japan, Thailand, and North America and changes in vehicle/model mix (materialized in FY2026 (ending March 2026))
• Risk of rising costs for raw materials, labor, and resource/energy prices, etc.
• Risk of demand structure changes accompanying progress in vehicle electrification (BEV adoption)
• Risk to North American operations from US trade policy reviews (additional tariffs, etc.)
• Risk of order fluctuations due to reorganization of global production sites
• Risk of deteriorating business environment due to concerns over energy supply and price trends stemming from the situation in the Middle East

Business Details

Manufactures and sells HDD Mechanism Components, Wire Springs / Thin Leaf Springs, Motor Cores, Fasteners (Screws), Precision Machined Products, and other products. In the automotive field, Motor Cores for HEVs and other applications are a mainstay, while in the information and communications field, HDD Mechanism Components for high-capacity HDDs for data centers are a core product. The segment has manufacturing sites in Japan and overseas (Thailand, the US, Mexico, China, India, etc.), with NHK Spring Co., Ltd., Nissin Precision Industry Co., Ltd., and Topura Co., Ltd. serving as the main operating companies.

Recent Overview

Net sales increased due to higher HDD Mechanism Components volume and consolidation of the Indian subsidiary, but profit declined due to higher fixed costs and tariff impact

In FY2026 (ending March 2026), sales volume of HDD Mechanism Components increased due to growing demand for high-capacity HDDs for data centers, and net sales to external customers rose to ¥105,612 million (up 3.5% year on year), also aided by the inclusion of the Indian subsidiary (NHK Automotive Components India Pvt. Ltd.) in the scope of consolidation. On the other hand, operating profit declined to ¥3,651 million (down 14.9% year on year) due to higher fixed costs and the impact of tariffs, among other factors. Capital expenditures increased 33.9% year on year to ¥10,627 million, reflecting continued investment to expand future production capacity. In addition, impairment losses were recognized across multiple segments, including the Industrial Machinery & Others Business, with the Precision Components Business recording an impairment loss of ¥1,384 million. For the next fiscal year (FY2027 (ending March 2027)), net sales are forecast at ¥108,000 million (up 2.3% year on year) and operating profit is forecast at ¥5,000 million (up 36.9% year on year), indicating a significant profit recovery.

Key Products

Growth Drivers

• Increased sales volume of HDD Mechanism Components driven by growing demand for high-capacity HDDs for data centers
• Increased demand for automotive-related components such as Motor Cores driven by strong demand for HEVs (hybrid electric vehicles)
• Sales contribution from the addition of the Indian subsidiary (NHK Automotive Components India Pvt. Ltd.) to the scope of consolidation
• Expansion of the global production system for Motor Cores with the completion of a new plant building at NHK Spring de Mexico
• Increased production capacity and capture of future demand through expanded capital expenditures (¥10,627 million in FY2026 (ending March 2026))

Risks

• Profit pressure from the impact of US additional tariffs (a negative impact on operating profit materialized in FY2026 (ending March 2026))
• Downward pressure on profit margin from increased fixed costs (higher depreciation and amortization due to expanded capital expenditures: ¥5,633 million in FY2026 (ending March 2026))
• Uncertainty in product demand due to changes in the pace of progress in vehicle electrification (BEV adoption)
• Risk of demand fluctuations from HDD manufacturers (a factor in sales volatility in the information and communications business)
• Risk of rising costs for raw materials, labor, and energy prices, etc.
• Risk of impairment losses (an impairment loss of ¥1,384 million was recorded in FY2026 (ending March 2026))

Business Details

An information and communications-related segment with HDD Suspensions and Semiconductor Test Probe Units as its core products. The segment is a direct beneficiary of growing demand for high-capacity HDDs for data centers and is the most important segment, accounting for more than half of the NHK Spring Group's overall operating profit. In FY2026 (ending March 2026), net sales maintained high growth of up 13.7% year on year, but operating profit declined slightly due to higher fixed costs, among other factors.

Recent Overview

Net sales achieved high growth of up 13.7% year on year, but operating profit declined slightly by 2.3% year on year due to higher fixed costs

In FY2026 (ending March 2026), sales volume of HDD Suspensions increased year on year due to growing demand for high-capacity HDDs for data centers, achieving high growth with net sales of ¥126,753 million (up 13.7% year on year). On the other hand, operating profit declined slightly to ¥26,058 million (down 2.3% year on year) due to higher fixed costs, among other factors, with the operating profit margin falling from 23.9% to 20.6%. For the next fiscal year (FY2027 (ending March 2027)), both higher sales and higher profit are expected, with net sales forecast at ¥144,000 million (up 13.6% year on year) and operating profit forecast at ¥30,000 million (up 15.1% year on year).

Key Products

Growth Drivers

• Expansion in sales volume of HDD Suspensions driven by robust growth in demand for high-capacity HDDs for data centers
• Volume-boosting effect from an increase in the number of suspensions mounted per high-capacity HDD
• Medium- to long-term growth in demand for high-capacity HDDs, driven by expanding AI data center investment
• Capture of demand through appropriate expansion of production capacity
• Productivity improvements through rationalization measures, including the introduction of AI-powered AOI (Automated Optical Inspection)

Risks

• Risk of demand fluctuations from HDD manufacturers (sharp demand declines during inventory adjustment phases)
• Downward pressure on profit margin from increased fixed costs (higher depreciation and amortization associated with capital expenditures)
• Risk of trade policy changes, including US additional tariffs
• Need for continuous investment in technology development to respond to higher capacity and enhanced functionality
• Long-term risk of shrinkage in the overall HDD market (substitution by cloud storage and SSDs)

Business Details

This segment encompasses a diverse range of products, including Semiconductor Process Components, ceramic products, spring mechanism components, piping support devices, Metal Substrates, parking systems, security products, lighting fixtures, golf shafts, and marine electronic remote controls. Semiconductor Process Components serve as the key profit driver, with production capacity being expanded under a two-plant system in Isehara and Miyata. For Metal Substrates, the company is promoting expanded sales from automotive LED applications to products supporting vehicle electrification. This segment forms the Group's non-automotive profit base, serving a diverse range of industries in Japan and overseas.

Recent Overview

Net sales increased 8.1% year on year, but operating profit declined 23.3% year on year due to increased depreciation and amortization, among other factors

Net sales for FY2026 (ending March 2026) increased to ¥124,535 million (up 8.1% year on year), but operating profit declined significantly to ¥7,294 million (down 23.3% year on year), due to increased depreciation and amortization associated with capital expenditures made to address future demand growth for Semiconductor Process Components and Metal Substrates, among other factors. In addition, an impairment loss of ¥6,809 million was recorded in the Industrial Machinery & Others segment. For FY2027 (ending March 2027), a significant recovery is expected, with net sales forecast at ¥133,000 million and operating profit forecast at ¥11,000 million.

Key Products

Growth Drivers

• Continued increase in demand for Semiconductor Process Components (sustained expansion in data center investment and demand for semiconductor manufacturing equipment)
• Profit contribution following completion of production capacity expansion for Semiconductor Process Components under the two-plant system in Isehara and Miyata
• Development and expanded sales of products supporting vehicle electrification (power modules, AC-DC/DC-DC converters) in Metal Substrates
• Expansion of overseas production system through NHK Manufacturing Malaysia and other entities
• Improved profit margin as pressure from increased depreciation and amortization eases once capital expenditures peak

Risks

• Increased depreciation and amortization associated with capital expenditures to address future demand growth for Semiconductor Process Components and Metal Substrates is weighing on profit in the short term (operating profit down 23.3% year on year in FY2026 (ending March 2026))
• An impairment loss of ¥6,809 million was recorded in the Industrial Machinery & Others segment in FY2026 (ending March 2026), indicating challenges in the profitability of the business portfolio
• Risk of demand fluctuations in the semiconductor market (uncertainty over the sustainability of market recovery)
• Impact of trade policy reviews in various countries, including US additional tariffs (tariff impact affected results for the current period)
• Risk of rising costs for raw materials, labor, and resource/energy prices, etc.
• Execution risk related to selection and concentration in other businesses (parking systems, golf shafts, etc.)