Key points for investors:
- Strong Q1 performance: Shipments reached a quarterly record of JPY111.1 billion, above external forecasts. Management raised the company-level forecast by about JPY9 billion (≈ JPY5 billion machinery & equipment, ≈ JPY3 billion other products). Some projects expected in Q2+ were brought forward into Q1, including evaluation/demo units recorded as shipments.
- Demand mix: Q1 outperformance was driven by ICs tied to generative AI (notably HBM and memory), and OSAT shipments increased (OSAT ≈ 30%). Memory accounted for just over 40% of Q1 shipments (DRAM heavier than NAND; roughly 60–70% DRAM vs 30–40% NAND by management’s estimate). Power semiconductors and SiC remain weak (each single-digit % of revenue).
- Near-term cadence: Management expects Q2 shipments to decline relative to Q1 largely because of timing (advance shipments in Q1), not necessarily a structural drop in generative AI demand. Q3 is viewed as likely modestly stronger than Q2, but Q4 remains uncertain. Overall H2 visibility is limited.
- Profitability and costs: Q1 gross profit margin was 68.1%, below prior year primarily due to foreign exchange (JPY144/USD vs JPY158/USD last year). On a constant FX of JPY158, GP would be ~70%. For Q2 (July–Sept) management expects GP to decline by less than ~2 percentage points (they assume JPY135/USD) and plans SG&A around JPY27 billion (bonus provisioning now linked to shipments on a cash flow basis, with some internal smoothing).
- Strategic product update: Progress on 3D NAND hybrid bonding (some customers moving toward mass production), growing interest and R&D activity for PLP and advanced packaging, but material mass-volume contributions are not yet confirmed. WMCM demand unclear; consumables affected by weaker SiC but utilization appears to be gradually recovering.
- Operational outlook: Factories generally busy (not in the acute resource-constrained state of COVID-era), with grinder/laser saw and many generative AI-related products contributing. Management notes a shift to shorter customer lead forecasts (fewer long-range POs), making visibility more volatile.
- Main risks and watch items: FX (yen strength depresses margins), shipment timing volatility (particularly generative AI-related concentration), continued weakness in power semiconductors/SiC demand, and uncertain timing/scale of adoption for advanced packaging (PLP, hybrid bonding).
Investors should monitor: Q2 actual shipments relative to the timing normalization, Q3 booking/signals for generative AI and memory customers, FX movement, and any concrete mass-production orders for hybrid bonding/PLP that would signal multi-quarter revenue uplift.
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