KURODA PRECISION INDUSTRIES LTD.

Business Details

The segment's core products are Precision Ground Ball Screws, Rolled Ball Screws / Ball Screw Actuators, XY Stages / Guides, and Gears. In addition to domestic manufacturing (Kuroda Precision Industries Ltd. itself), the segment operates a multi-site global structure in which the German subsidiary Jenaer Gewindetechnik GmbH, the U.S. subsidiary KURODA JENA TEC, INC., Kuroda Precision Industries Korea, and Pinghu Kuroda Precision Industries Co., Ltd. in China handle manufacturing, sales, and assembly. Major customers are semiconductor and LCD-related equipment manufacturers, giving the segment a structure whose performance is heavily influenced by demand cycles in that market.

Recent Overview

Orders recovered sharply, but the segment loss widened due to worsening profitability at European and U.S. subsidiaries

In FY2026 (ending March 2026), orders for products for the semiconductor and LCD-related equipment market recovered sharply since the end of last year, with orders received increasing significantly to ¥7,765 million (up ¥1,425 million, or 22.5%, year on year). Net sales increased only to ¥6,481 million (up ¥108 million, or 1.7%, year on year), as an increase in sales at Kuroda Precision Industries Ltd. on a standalone basis was offset by a decline in sales at the European and U.S. subsidiaries. In terms of profit, while Kuroda Precision Industries Ltd. on a standalone basis achieved higher profit through increased sales and cost reductions, deteriorating profitability at the European and U.S. subsidiaries (particularly the German subsidiary) weighed on results, and the operating loss widened to ¥187 million (compared with an operating loss of ¥125 million in the prior period). An impairment loss on fixed assets of ¥208 million and restructuring costs of ¥241 million related to the German subsidiary were recorded as extraordinary losses on a consolidated basis.

Key Products

Growth Drivers

• Sharp recovery in orders for the semiconductor and LCD-related equipment market: Orders have recovered sharply since the end of last year, with orders received for FY2026 (ending March 2026) increasing significantly to ¥7,765 million (up 22.5% year on year). A full-scale contribution to sales is expected going forward
• Increased sales and profit at Kuroda Precision Industries Ltd. on a standalone basis: The domestic business achieved higher profit through increased sales and cost reductions, leaving significant room for profit improvement once the issues at the European and U.S. subsidiaries are resolved
• Expansion of sales of linear motion system products: The mid-term management plan prioritizes expanding sales of linear motion system products and enhancing automated production lines as key measures
• Development of markets outside the semiconductor sector: The company is working on building a customer base that can generate profit even during troughs in the semiconductor market, as a strategic priority

Risks

• Continued weak performance at European and U.S. subsidiaries (particularly the German subsidiary Jenaer Gewindetechnik GmbH): Profitability continued to deteriorate in FY2026 (ending March 2026), with an impairment loss of ¥208 million and restructuring costs of ¥241 million recorded. The effectiveness of restructuring measures remains uncertain
• Dependence on the semiconductor and LCD market demand cycle: Fluctuations in demand in major customers' markets directly affect segment performance, with a risk that the pace of recovery could fall short of expectations
• Deterioration in product mix: A decline in the sales ratio of high-margin ground ball screws is structurally pressuring segment profitability
• Slowdown in the Chinese economy: Risk of declining sales at the Chinese subsidiary (Pinghu Kuroda Precision Industries Co., Ltd.), and risk of spillover effects on related businesses from China's rare earth export restrictions
• Foreign exchange risk: With a multi-site global structure spanning Germany, the U.S., Korea, and China, exchange rate fluctuations affect performance