Key points for investors:
- Strong Q3 performance: Net sales JPY 654.5 billion (+15.5% QoQ), gross profit JPY 311.7 billion (47.6% margin), operating income JPY 199.6 billion (+34.7% QoQ), net income JPY 157.2 billion (+33.6% QoQ). Field solutions and parts/service sales rose with improving fab utilization. Free cash outflow JPY 64.1 billion in Q3; expected to turn significantly positive in Q4. Share buyback program completed (2,024,200 shares, JPY 46.9 billion).
- FY2025 guidance unchanged and ambitious: Management reiterates full‑year net sales forecast of JPY 2,400 trillion (transcript figure) implying ~31% YoY growth and expects record highs for sales, profit and EPS. R&D planned at JPY 254 billion, CapEx JPY 170 billion. Full‑year dividend per share guided to JPY 571. Total shareholder returns (dividend + buyback) expected to be a record JPY 413.3 billion.
- Structural growth drivers: Continued strong AI-related investment (advanced logic, GPUs/ASICs shifting to 3nm, HBM stacking growth and DDR5), heterogeneous integration and packaging, and demand for advanced DRAM (HBM) are expected to drive the WFE market and TEL's outperformance. Management expects calendar 2025 WFE ~US$110 billion (flat vs 2024) and double‑digit growth in calendar 2026 driven by AI technology transitions.
- Product and customer momentum: Multiple PORs won for high-value strategic products — Episode 1 single-wafer film deposition has PORs for logic backside PDN from major customers; cryogenic etching won a high-volume POR with one NAND customer and other evaluations underway. These PORs are expected to contribute materially in upcoming periods (mass production timing varies by product/customer).
- Manufacturing and efficiency initiative: TEL will build a new automated production building in Miyagi to scale capacity and lower costs (targets include 4x labor productivity, 2x space efficiency, and 3x reduction in lead time). Management frames this as part of a wider supply‑chain smart‑manufacturing effort.
- Regional mix and risks: China share rose earlier but is expected to moderate to mid‑30% range next fiscal year (from high‑40% in H1). Management expects some decline in certain Chinese non‑memory investment (10–20% decline cited) but believes memory and high‑value product demand will offset that. Ongoing export control/regulatory developments are monitored and could affect timing and customer demand.
- Near‑term outlook and uncertainties: Management sees no immediate reason to reduce FY guidance despite Q3 strength, but notes delivery timing (month‑to‑month concentration, pulled‑forward orders) and export control policy developments as items to monitor. Field solutions (spare parts/services) and installed base growth are expected to continue supporting recurring revenue.
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