Kokusai Electric Corp
TSE:6525
Kokusai Electric Corp
Kokusai Electric Corp., a pivotal player in the semiconductor industry, roots its origins in the burgeoning tech landscape of Japan. Renowned for its cutting-edge equipment used in manufacturing semiconductors, the company's journey reflects a blend of innovation and precision engineering. Specializing in thermal processing systems, Kokusai Electric has carved out a niche in providing the critical machinery required in the production of integrated circuits. These systems are integral to industries ranging from consumer electronics to automotive technology, positioning the company as a vital cog in the semiconductor supply chain. With such a technologically demanding field, the company's prowess in research and development is not just significant but indispensable.
This technical sophistication of Kokusai Electric's offerings ensures a steady influx of revenue, primarily through the sale of its equipment to global semiconductor manufacturers. By continually advancing its product lineup with the latest technological capabilities, the company not only enhances its profitability but also cements its reputation as a trusted partner in the industry. Beyond sales, Kokusai Electric generates additional income through comprehensive customer support and service agreements, an essential aspect as clients depend on maximum uptime and efficiency from their equipment. This dual approach of leading-edge product development combined with robust after-sale support underpins Kokusai Electric's sustained financial health and industry standing.
Kokusai Electric Corp., a pivotal player in the semiconductor industry, roots its origins in the burgeoning tech landscape of Japan. Renowned for its cutting-edge equipment used in manufacturing semiconductors, the company's journey reflects a blend of innovation and precision engineering. Specializing in thermal processing systems, Kokusai Electric has carved out a niche in providing the critical machinery required in the production of integrated circuits. These systems are integral to industries ranging from consumer electronics to automotive technology, positioning the company as a vital cog in the semiconductor supply chain. With such a technologically demanding field, the company's prowess in research and development is not just significant but indispensable.
This technical sophistication of Kokusai Electric's offerings ensures a steady influx of revenue, primarily through the sale of its equipment to global semiconductor manufacturers. By continually advancing its product lineup with the latest technological capabilities, the company not only enhances its profitability but also cements its reputation as a trusted partner in the industry. Beyond sales, Kokusai Electric generates additional income through comprehensive customer support and service agreements, an essential aspect as clients depend on maximum uptime and efficiency from their equipment. This dual approach of leading-edge product development combined with robust after-sale support underpins Kokusai Electric's sustained financial health and industry standing.
In-Line Results: Kokusai Electric's Q3 revenue and profit both fell year-on-year and quarter-on-quarter, but matched the revised forecasts released after Q2.
Service Revenue Growth: Service revenue, particularly from DRAM upgrade modifications, increased significantly, offsetting declines in new equipment sales.
Order Momentum: Q3 orders reached JPY 62 billion, beating expectations by about 20%, driven by strong global DRAM and logic/foundry demand.
2026 Outlook Unchanged: Management maintained its full-year guidance, expecting similar trends in Q4, but highlighted order strength setting up for growth in FY March 2027.
Raised 2027 Growth Target: Due to robust demand, especially for advanced DRAM and logic/foundry, FY March 2027 revenue growth target was increased from over 10% to over 20%.
WFE Market Upgrade: Management now sees the 2026 WFE market up 10% year-on-year (previously 5%), led by AI-related investments.
Profitability Inflection: Gross margin is expected to recover next year, with product mix improving and production volumes rebounding from this year’s bottom.
