Tera Probe, Inc.

Business Details

As a member of the PTI group, the company provides wafer test and final test contract services for logic, memory, image sensor, and other semiconductor products to domestic and overseas semiconductor manufacturers and fabless companies. The company operates through a two-site structure comprising its Kyushu office (Japan) and its consolidated subsidiary TeraPower Technology Inc. (Taiwan). It also offers Turnkey Service in collaboration with PTI and other OSAT companies. In the first quarter of FY2026 (ending December 2026), logic products accounted for approximately 92% of net sales, with server- and AI-related products and logic products for a specific customer's EV applications remaining strong.

Recent Overview

Net sales up 37.5% and operating profit up 83.1%, driven by strong AI and server demand

In the first quarter of FY2026 (ending December 2026) (January to March 2026), net sales reached ¥12,722 million (up 37.5% year on year), supported by steady performance of server- and AI-related products, an increase in some consumer products, and continued strength in logic products for a specific customer's EV applications. Sales growth outpaced the increase in depreciation and amortization from advance investment for server/AI applications (up from ¥3,228 million to ¥4,338 million year on year), resulting in operating profit of ¥3,211 million (up 83.1% year on year) and an improved operating margin of 25.2%. Property, plant and equipment expanded to ¥81,612 million, up ¥12,495 million from the end of the previous fiscal year, and long-term borrowings also increased by ¥7,048 million. The cumulative second-quarter forecast has been revised upward to net sales of ¥26,300 million and operating profit of ¥6,600 million, and the cumulative third-quarter forecast to net sales of ¥40,800 million and operating profit of ¥10,220 million.

Key Products

Growth Drivers

• Continued robust demand for server- and AI-related products (Q1 FY2026, ending December 2026, net sales up 37.5% year on year)
• Expansion of logic product transactions for a specific customer's EV applications (logic product net sales expanded from ¥8,667 million to ¥11,735 million)
• Increased production capacity through capital expenditure expansion at Taiwan subsidiary TPW (property, plant and equipment up ¥12,495 million from the end of the previous fiscal year)
• Continued sales expansion at major customers such as Annapurna Labs and Socionext
• Demand shift toward Japan and Taiwan operating bases amid supply chain restructuring driven by geopolitical risk
• Outlook for further increases in server/AI demand from the second quarter onward, with continued growth in contract volume expected

Risks

• Risk of sales concentration in specific customers (Renesas Electronics 23.9%, Annapurna Labs 17.8%, Socionext 13.1%)
• Risk of short-term demand fluctuations in the semiconductor market (e.g., fluctuations in demand for automotive logic products)
• Increased financial burden associated with large-scale capital expenditure (long-term borrowings increased by ¥7,048 million from the end of the previous fiscal year; equity ratio declined from 40.2% to 37.0%)
• Capital efficiency challenge with ROE below the cost of shareholders' equity (FY2025, ending December 2025, ROE of 8.6%)
• Geopolitical risk associated with concentration of operations in Taiwan (the majority of property, plant and equipment is located in Taiwan)
• Foreign exchange fluctuation risk (a foreign exchange gain of ¥157 million was recorded in the first quarter, but no foreign exchange gain is assumed from the second quarter onward)
• Risk that increased depreciation and amortization from advance investment (up 34.4% year on year to ¥4,338 million) will weigh on profit