JAPAN ELECTRONIC MATERIALS CORPORATION

Business Details

This business develops, manufactures, and sells probe cards used for electrical characteristic testing of semiconductor wafers. It operates three product lines: cantilever-type (C-type), vertical-type (V-type), and MEMS-technology-based M-type. In addition to domestic plants (Head Office, Sanda, Kumamoto), the company sells globally through overseas subsidiaries in the US, Hong Kong, Taiwan, Europe, China, Thailand, and Shenzhen. By capturing demand for advanced semiconductors, centered on probe cards for memory applications, the segment achieved its highest-ever sales and profit since the company's founding in FY2026 (ending March 2026).

Recent Overview

Accelerated sales expansion of memory probe cards drove record sales and profit since the company's founding.

In FY2026 (ending March 2026), demand for advanced memory probe cards, including those for HBM and image processing semiconductors for generative AI, continued to expand, resulting in segment sales of ¥29,142 million (up 23.5% year on year) and segment profit of ¥9,139 million (up 51.5% year on year), both renewing record highs since the company's founding. The full-scale operation of the Kumamoto No. 4 Plant and continued capital investment in existing plants contributed to improved production capacity. Meanwhile, demand for non-memory probe cards remained soft. To strengthen future production capacity, the company resolved in February 2026 to construct a new plant in Amagasaki City, Hyogo Prefecture (scheduled for completion in August 2028).

Key Products

Growth Drivers

• Continued robust expansion in demand for advanced semiconductors such as image processing semiconductors for generative AI and HBM (High Bandwidth Memory)
• Progress in expanding sales of high-value-added memory probe cards for domestic and Asian markets
• Increased production capacity and higher domestic plant utilization rates through full-scale operation of the Kumamoto No. 4 Plant and continued capital investment in existing plants
• Strengthening of M-type probe card production capacity through construction of a new plant in Amagasaki City, Hyogo Prefecture (scheduled for completion in August 2028)
• Medium- to long-term demand expansion driven by moves to build new plants to strengthen and secure semiconductor manufacturing infrastructure for data centers
• Strengthening product competitiveness through continued development of probe cards for next-generation semiconductors

Risks

• Risk of delayed demand recovery for non-memory probe cards (for automotive, industrial equipment, etc.)
• Risk of increased costs associated with construction of the new plant (Amagasaki City, scheduled for completion in August 2028) and advance investment in existing plants
• Risk of sales concentration in major customers (approximately 30% of sales from two Micron-related companies)
• Fluctuations in semiconductor market demand (uncertainty over recovery of markets other than generative AI applications)
• Impact on the entire supply chain from developments in US trade policy and heightened geopolitical risk
• Impact on earnings from foreign exchange rate instability
• Concerns over a global economic slowdown due to escalating tensions in the Middle East

Business Details

As the company's second segment, this business develops, manufactures, and sells Cathodes and Filaments for electron tubes. It is a domestically self-contained business primarily handled by Nihon Denshi Zairyo Co., Ltd., and its share of consolidated sales in FY2026 (ending March 2026) is extremely small at approximately 0.8%. While the Semiconductor Inspection Components Business is growing rapidly, this segment has continued to trend flat, and its contribution to overall group earnings remains limited.

Recent Overview

Both sales and profit declined slightly, with profitability also continuing to trend downward.

Full-year sales for FY2026 (ending March 2026) were ¥223 million (down 1.2% year on year), and segment profit was ¥8 million (down 18.9% year on year), with both sales and profit falling below the prior period. The segment profit margin also declined to approximately 3.6% from approximately 4.4% in the prior period. While the Semiconductor Inspection Components Business achieved record-high performance since the company's founding through expanded sales of memory probe cards, this segment has continued its shrinking trend, further diminishing its presence within the group.

Key Products

Growth Drivers

• Sales support from stable demand from existing customers for electron tube components
• Maintenance of a certain level of demand due to the difficulty of substituting electron tube components for specific applications

Risks

• Extremely small sales scale of approximately ¥223 million, resulting in low strategic priority within the group
• Low segment profit margin (approximately 3.6% in FY2026, ending March 2026), with limited scope for profitability improvement
• Difficulty in expecting medium- to long-term growth due to the structural shrinkage trend of the electron tube market
• Risk of lower investment priority relative to the Semiconductor Inspection Components Business in the allocation of management resources
• A continuing decline trend, with both sales and profit falling below the prior period, becoming increasingly entrenched