Microwave Chemical Co., Ltd.
9227・Growth Market・Services
Business
Microwave Chemical Co., Ltd. was founded in 2007. The company aims to establish a global standard for environmentally-friendly processes characterized by "energy efficiency, high efficiency, and compactness" by replacing conventional manufacturing processes based on fossil-fuel-derived "heat and pressure" with electricity-derived "microwaves." Across a broad range of chemical industry fields—including carbon materials, chemical recycling, metal smelting/mining processes, electronic materials, and pharmaceuticals—the company serves major chemical and materials manufacturers as its primary customers, providing one-stop support from Phase 1 (Lab Development) through Phase 2 (Demonstration Development), Phase 3 (Commercial Unit Installation), and Phase 4 (Manufacturing Support). The company listed on the Tokyo Stock Exchange Growth Market in June 2022. As of the end of FY2025 (ending March 2025), it held a pipeline of 71 total contracts.
Business Model
In Phase 1 (Lab Development) and Phase 2 (Demonstration Development), revenue is recognized as co-development fees and design fees. In Phase 3 (Commercial Unit Installation) and Phase 4 (Manufacturing Support), in addition to equipment sales, the company receives license income (upfront payments and royalties) representing a portion of the cost reductions and added value that customers gain from adopting the microwave process. Of the ¥1,608 million in net sales for FY2025 (ended March 2025), Phase 2 accounted for ¥1,330 million (82.7%), and over the medium to long term, continuous royalty income from the commercialization pipeline is expected to become the pillar of profit contribution.
Company Strengths
Since its founding in 2007, the company has accumulated a proprietary microwave absorption measurement method, coupled electromagnetic field and thermal fluid simulation technology, and a group of 20 elemental technologies, achieving commercial-scale production of 3,000 tons per year that overturns industry conventions. The database and know-how built through more than 10 years of joint development with a diverse range of chemical companies function as a barrier to entry.
The Osaka Business Site houses the No. 1 to No. 3 Demonstration Buildings (completed in March 2024), providing in-house infrastructure capable of supporting all phases from lab development to bench units, pilot units, and commercial units. The company employs 18 staff in the R&D Department and 16 in the Engineering Department, with technical personnel comprising 69.4% of total employees.
The total number of contracts has increased from 61 in FY2023 (ending March 2023) to 64 in FY2024 (ending March 2024) to 71 in FY2025 (ending March 2025). In chemical recycling, the company has accumulated elemental technologies through more than 30 projects with over 20 companies. In mining processes, a standard bench unit was completed in March 2024, and the company has built up a track record across multiple fields, including successful calcination and reduction of nickel ore in collaboration with Pacific Metals Co., Ltd.
ENVALITH's Perspective
Performance Trend
Cumulative sales for the nine months of FY2026 (ending March 2026) [April 2025–December 2025] were ¥556 million (down 17.9% year on year), and the operating loss widened sharply to ¥685 million (versus a loss of ¥149 million in the same period of the prior year). Cost of sales surged from ¥145 million in the same period of the prior year to ¥455 million, leaving gross profit at only ¥101 million, while selling, general and administrative expenses also increased to ¥787 million (versus ¥682 million in the same period of the prior year). Over the past five fiscal periods, the company had recorded operating profits in FY2023, FY2024, and FY2025, but FY2026 (ending March 2026) covers an interim period within a 15-month accounting period, and a full-year operating loss of ¥853 million is forecast, representing a sharp swing into deficit. Total assets fell to ¥1,547 million (down ¥577 million from the end of the prior period), and net assets declined to ¥395 million (down ¥668 million from the same point), indicating ongoing erosion of the company's financial base.
Growth Strategy
Aiming for monetization through three pillars: accelerating the transition of partnership businesses to Phase 3, in-house oscillator production, and new business exploration
Advancing existing development projects in carbon fiber manufacturing, mining processes, chemical recycling, and other areas to the commercial unit installation phase, aiming to realize large-scale revenue. As of the end of Q3, contracted projects stood at 44 (full-year plan: 64) and newly acquired projects at 10 (full-year plan: 25), indicating limited progress relative to the plan.
Through investment in the development of a new standard demonstration unit for the mining process and upgrades to the existing standard bench unit, the company aims to improve gross margin and shorten lead times through technology standardization. Cumulative gross margin through Q3 was 18.1%, a significant decline from 78.6% in the same period of the previous year, making the realization of standardization benefits an urgent priority.
In response to the challenge whereby rising oscillator costs and extended lead times associated with scaling up microwave equipment had been squeezing profits in the partnership business, the company will commence in-house development starting from FY2026 (ending June 2026). Through improvements to the cost structure, the company aims to enhance the profitability of the partnership business.
Jointly with Takeei Corporation, the project was selected for a Ministry of the Environment subsidy (the FY2025 Subsidy Program for Projects to Curb Carbon Dioxide Emissions, etc.). The company is developing and conducting demonstration tests of microwave-based EVA resin removal and reduction technology, addressing the social challenge of large-scale disposal of used solar panels as a new area of focus.
Envisions expanding microwave applications into areas such as semiconductor materials, offering new non-microwave solutions to existing customers, and pursuing small-scale M&A. Exploration continues through a cycle of formulating and validating strategic hypotheses.
Last updated: July 17, 2026