Semiconductor Materials and Components Q2 FY2026: AI boom creates clear winners

• AI and data center demand provided a common tailwind. Ibiden grew sales of semiconductor package substrates, while TOK benefited from photoresists. SUMCO also shipped more for advanced logic and memory applications.
• Higher demand did not always translate into higher profits. SUMCO posted an operating loss despite revenue growth, as manufacturing costs and depreciation weighed on earnings.
• A weaker yen also supported earnings. At Ibiden, currency movements versus a year earlier helped drive profit growth.
• Demand outside semiconductors widened the gap between companies. Mitsui High-tec significantly increased profit on growth in electrical components for EVs and HEVs.
• The simple average of reported revenue was ¥152.1 billion, and the simple average of operating profit was ¥15.3 billion. Reporting periods differ, however, so these figures do not represent a like-for-like industry average.

Ibiden recorded a 26.4% year-on-year rise in revenue and a 52.4% increase in operating profit. Its 21.8% operating margin was the highest among the four companies. These figures cover its first quarter.

Among companies reporting interim results, TOK led with operating profit of ¥28.9 billion. Revenue rose 25.1% and operating profit gained 45.4%. Its 20.7% margin also stood out, showing its ability to turn materials demand into earnings.

SUMCO had the toughest period. Revenue rose 4.7% to ¥215.0 billion, but operating results swung from a ¥7.5 billion profit a year earlier to a ¥6.4 billion loss. Higher shipments for AI applications could not offset manufacturing costs and depreciation.

Mitsui High-tec increased operating profit 86.2%, the fastest growth rate among the four. Its operating margin was 9%, however, below those of Ibiden and TOK.

• SUMCO is pursuing structural reforms in its business for wafers of 200 millimeters and below. High manufacturing costs and depreciation remain a burden, suggesting that a recovery in profitability could take time.
• Ibiden is capturing AI semiconductor demand through its package substrate business. It forecasts full-year operating profit of ¥127.0 billion, up 104.7% from the previous year. The depreciation burden from capital investment remains a risk to watch.
• TOK is seeing strong demand for functional materials, including photoresists. It is also moving to expand production capacity in Kumamoto and Taiwan, with the focus on building supply to meet rising demand. Its full-year operating profit forecast is ¥60.6 billion.
• Mitsui High-tec is relying on growth in electrical components for EVs and HEVs. Interim operating profit rose 86.2% to ¥11.8 billion. Its full-year forecast is ¥19.5 billion, and the question is whether profit growth can continue in the second half.

The companies are taking different paths. Alongside capacity expansion for materials and substrates, cost control and product mix are shaping profitability.

• A reversal in AI investment: Demand is concentrated in some data center investments. Any slowdown could affect orders for advanced products and capacity utilization.
• Capital spending and depreciation: Capacity expansion prepares companies for future orders, but fixed costs can squeeze profits if utilization fails to rise. SUMCO's loss illustrates the burden.
• Raw material and manufacturing costs: Profit margins depend on whether companies can pass higher costs on through selling prices.
• Currency swings: A weaker yen can be a tailwind, but a shift toward yen appreciation could weigh on earnings.
• Customer and end-market concentration: Greater reliance on specific areas such as advanced semiconductors or EVs leaves companies more exposed to shifts in demand.

SUMCO ranked first in revenue at ¥215.0 billion, but posted an operating loss. Revenue scale and earnings power do not rank companies in the same order. TOK led operating profit at ¥28.9 billion, followed by Ibiden at ¥26.9 billion.

Ibiden's figures cover its first quarter, unlike the interim results reported by the other companies. Revenue and profit rankings should therefore be treated as reference points, alongside growth rates and margins.

The results highlight how unevenly the AI demand windfall is being shared. Product value, supply capacity and fixed-cost burdens are creating divergent outcomes despite a common tailwind.

In semiconductor-related companies, strong demand is only part of the picture. Improvements on the factory floor and stable operation of equipment also matter. SUMCO's results show how higher shipments can still lead to losses when costs are high.

Career opportunities extend beyond materials development and process engineering to quality assurance, equipment maintenance, procurement and coordination with overseas sites. Looking beyond AI growth areas to EVs and structural reforms in established products can also reveal how roles and career paths differ by company.