INTER ACTION Corporation

Business Details

This segment develops, manufactures, and sells Light Source Devices for Inspection and Hitomi Modules used in the manufacturing process of CCD and CMOS image sensors. Sales to major domestic customers declined sharply due to a slowdown in capital expenditure demand, while sales to major overseas customers remained strong, supported by capital expenditure demand associated with new customer development. The segment profit margin remained at a high level of 45.6%, and this segment continues to be the core business driving profitability for the group as a whole. Over the medium to long term, the company positions demand for building production lines for image sensors used in physical AI applications such as automotive and robotics as a growth driver.

Recent Overview

Sales and profit declined amid weak domestic demand, but overseas orders expanded rapidly, with the fiscal year-end order backlog roughly 2.7 times the prior year level

For the full year of FY2026 (ending May 2026), sales decreased to ¥2,952 million (down 22.9% year on year) and segment profit decreased to ¥1,345 million (down 30.9% year on year), as capital expenditure demand from major domestic customers settled down. On the other hand, sales of Light Source Devices for Inspection and Hitomi Modules to major overseas customers remained strong, contributing to sales growth. In terms of orders, orders received increased significantly to ¥4,566 million (up 84.2% year on year), and the fiscal year-end order backlog rose sharply to ¥2,646 million (up 169.8% year on year), driven by capital expenditure demand associated with new customer development by major overseas customers. Segment sales for FY2027 (ending May 2027) are projected at ¥5,100 million.

Key Products

Growth Drivers

• Continued robust capital expenditure demand associated with new customer development by major overseas customers for manufacturing image sensor-equipped products
• Demand for introduction of advanced processes accompanying the increase in size and density of image sensors
• Medium- to long-term capital expenditure demand associated with building image sensor production lines for physical AI applications such as automotive and robotics
• Expectations of medium- to long-term capital expenditure recovery as major domestic customers consider building image sensor production lines for automotive and robotics applications at new plants
• Promotion of development of a wide range of equipment lineups aimed at new customer development

Risks

• High dependence on the capital expenditure cycle of major domestic customers (a pause in demand directly affects business results)
• Risk of sales and order concentration on specific major overseas customers (accounting for the majority of the order backlog)
• Risk of fluctuations in image sensor demand due to changes in the smartphone market
• Increasing caution in customers' capital expenditure decisions due to trends in U.S. trade policy and geopolitical risk
• Uncertainty in order outlook due to the fluidity of the timing of major customers' capital expenditures