ENVALITH
株式会社KOKUSAI ELECTRIC logo

KOKUSAI ELECTRIC CORPORATION

6525・Prime Market・Electric Appliances

Official website
株式会社KOKUSAI ELECTRIC logo
KOKUSAI ELECTRIC CORPORATION6525

Business

KOKUSAI ELECTRIC CORPORATION is a specialized manufacturer that develops, manufactures, sells, and provides maintenance services globally for equipment used in the "film deposition" and "thermal processing" processes of semiconductor front-end manufacturing. Its core products are Batch Film Deposition Equipment (AdvancedAce® Series / TSURUGI® Series) and Single Wafer Plasma Treatment Equipment (MARORA®). In 2025, the company achieved the No.1 global revenue share in both the Batch ALD-compatible equipment market and the Plasma Gate Modification Tools market. Its major customers are leading semiconductor device manufacturers such as Samsung Electronics and TSMC, and it supplies products across the NAND, DRAM, and Logic/Foundry fields. The company comprises itself and seven consolidated subsidiaries, with global sites in Toyama, Tonami, Korea, the United States, Europe, Taiwan, China, and Singapore.

Business Model

Revenue consists of two categories: the "Equipment Business" and the "Service Business." In the Equipment Business, the company sells high value-added Batch Film Deposition Equipment and Single Wafer Treatment Equipment to semiconductor device manufacturers, while in the Service Business, it provides after-sales services such as Parts Sales, Maintenance Services, Paid Repairs, and Equipment Relocation and Modification (Upgrade) Services. In FY2026 (ending March 2026), service revenue expanded rapidly to ¥95,129 million (127.4% year-on-year), reflecting a structure in which recurring revenue grows in line with the accumulation of the installed base.

Company Strengths

Ranked No. 1 in the world in revenue share in both the batch ALD-compatible equipment market and the Plasma Gate Modification Tools market in 2025 (Source: TechInsights Inc., Gartner®). Batch ALD technology, which achieves both highly challenging film deposition and high productivity, is a core technology that competitors find difficult to imitate in a short period of time, and the company maintains a high share in leading-edge DRAM, NAND, and Logic/Foundry applications.

The company has established a system for providing Parts Sales, Maintenance Services, and Paid Repairs across the entire lifecycle of its equipment, as well as modification services. Service revenue in FY2026 (ending March 2026) expanded rapidly to ¥95,129 million (127.4% year on year), functioning as recurring revenue that complements fluctuations in equipment sales. The cumulative increase in the number of installed units underpins the structure supporting the sustained expansion of service revenue.

The company has accumulated nearly 70 years of technological expertise since entering the semiconductor production equipment business in 1956. It possesses a Batch Film Deposition Equipment platform that integrates core technologies in temperature control, automated transport, vacuum gas replacement, cooling, and film deposition, and invested ¥18,258 million in R&D expenses in FY2026 (ending March 2026). The company also promotes collaboration with universities and external institutions, continuing to strengthen its development structure for next-generation and next-next-generation technologies.

ENVALITH's Perspective

Revenue for FY2026 (ending March 2026) was ¥235,079 million (down 1.6% year on year), and operating profit was ¥41,836 million (down 18.5% year on year), representing a decline in both revenue and profit. The main cause was the settling of the active DRAM-related capital investment in China seen in the previous period, with revenue to China falling sharply from ¥111,901 million to ¥90,597 million. External factors such as China's export restrictions and tariff policies continue to have an impact, and geopolitical risk remains a factor of uncertainty for performance. For FY2027 (ending March 2027), revenue of ¥280,000 million (up 19.1% year on year) is projected, with recovery in demand from South Korea and Taiwan, driven by AI-related demand, being key to the recovery.

The operating profit margin for FY2026 (ending March 2026) was 17.8% (versus 21.5% in the previous period), and adjusted operating profit also declined significantly to ¥47,596 million (from ¥57,753 million in the previous period). Both gross profit margin and the SG&A expense ratio deteriorated due to a combination of factors: lower utilization rates at production plants, changes in product mix (a decline in the ratio of high-margin products), and upfront investment such as R&D for future growth. For FY2027 (ending March 2027), the company expects profitability to improve through a significant improvement in production plant utilization rates, but whether this can be achieved will be key to the recovery of profit margins.

Starting this fiscal year, the company changed its estimation method for the write-down of standing inventory (abolishing classification based on "elapsed time since last receipt"), resulting in a decrease in cost of sales of ¥1,837 million and a corresponding increase in operating profit of the same amount. This change was made against the backdrop of a shift in ordering policy toward earlier procurement in response to supply chain disruptions; however, inventory balances increased from ¥83,200 million to ¥88,890 million, indicating that inventory levels remain elevated. It is necessary to continue closely monitoring underlying profitability, excluding the impact of the valuation method change, as well as trends in inventory turnover.

Growth Strategy

Capturing AI-driven demand, the company is expanding its Batch ALD and treatment technologies into DRAM and Logic/Foundry applications, aiming for growth exceeding the overall market through global site development and service business expansion

Against a backdrop of accelerating capital investment for generation transitions and expanded production scale in high-performance Logic and DRAM, driven by growing data center server demand accompanying the spread of generative AI, the company aims to expand the sales mix of equipment for advanced devices, leveraging its technological strength as the world's No. 1 share holder in Batch ALD and single wafer treatment equipment.

Following the expansion of the demo evaluation area in Korea and the establishment of the Yokohama Technology Center, a new demo center will be established in the United States (scheduled for completion in September 2026). By building a system for evaluation and development in close proximity to major customers, the company aims to accelerate adoption in next-generation processes and acquisition of new customers.

Upgrade and modification work (improving performance and functionality of existing equipment) for DRAM applications grew in FY2026 (ending March 2026). Along with the expansion of the cumulative installed base, the company will steadily build up service revenue from parts sales, maintenance, and modifications, strengthening the recurring revenue base that mitigates fluctuations in the equipment sales cycle.

In FY2026 (ending March 2026), a decline in production plant utilization rates significantly pressured profit margins. In FY2027 (ending March 2027), the company expects a substantial improvement in production utilization rates driven by an order recovery backed by expanding AI-related demand, and aims to achieve adjusted operating profit of ¥60,500 million (up 27.1% year on year).

With an eye toward demand for AI, IoT, DX, and green transformation, the company is strengthening its equipment deployment in the power device and mature node segments, aiming to capture revenue opportunities as demand recovers for consumer electronics, automotive, and industrial equipment applications.

Last updated: July 19, 2026