154 Japanese Chip Firms Log KRW 69 Trillion in Sales, Highest in 5 Years

Tokyo Shoko Research said on the 10th that it had compiled a recent survey of the 2025 results of 154 major semiconductor-related manufacturers in Japan. According to the survey, the combined sales of the 154 companies came to JPY 7.9115 trillion in fiscal 2025, up 17.1% from a year earlier, or about KRW 68.9435 trillion. Their combined net profit was JPY 712.5 billion, up 5.4% from a year earlier, or about KRW 6.5 trillion. Both sales and profit reached their highest levels in the past 5 years.

Drivers of the improved results included the spread of generative AI, rising semiconductor demand for data centers, shortages of NAND flash memory supply, and higher selling prices. The firm said the expansion in semiconductor demand for data centers amid the spread of generative AI, together with price increases stemming from tight NAND flash memory supply and demand, worked in tandem.

The survey covered 154 major semiconductor-related manufacturers in Japan. The industries surveyed were manufacturing under Japan's Standard Industrial Classification, and the detailed sectors included electronic parts, devices and electronic circuit manufacturing, electronic device manufacturing, and integrated circuit manufacturing. The most recent closing period covered April 2025 through March 2026, and the selection criterion was companies whose results could be confirmed for 5 consecutive fiscal years.

Tokyo Shoko Research said the overall results were driven by expanding data center demand amid the spread of generative AI, shortages of NAND flash memory supply, and the resulting rise in selling prices. It added that the spread of generative AI boosted demand for large-capacity, high-speed SSDs at data centers, while the unit sales prices of NAND flash memory also rose.

Kioxia ranked first in sales by company. Kioxia's sales increased 38.5% from a year earlier. The company's sales growth widened as demand for large-capacity, high-speed SSDs at data centers expanded and NAND flash memory selling prices rose.

Sony Semiconductor Solutions ranked second in sales by company. In smartphone use, stacked CMOS image sensors became larger and more sensitive. Demand for sensing also expanded in the automotive camera market and the industrial camera market, factors that also contributed to Sony Semiconductor Solutions' results.

Renesas Electronics ranked third in sales by company. As vehicles continued to become more electronic and advanced, demand for automotive microcontrollers also held up. Renesas Electronics also captured demand for semiconductors used in industrial equipment and IoT, paving the way for its third-place finish.

Against this backdrop, Sony Semiconductor Solutions lifted results on the back of more advanced image sensors and expanding sensing demand for automotive and industrial use, while Renesas Electronics followed thanks to automotive microcontroller demand and absorption of demand for semiconductors used in industrial equipment and IoT. The top 5 accounted for 79.1% of total sales.

Among all 154 companies, the combined sales share of the top 5 companies was 79.1%. The analysis showed a clear concentration of sales among large companies.

At the root of this trend lies the nature of the semiconductor industry. The industry requires large-scale investment in R&D and production facilities.

Under this trend, the company with the highest sales growth rate was JASM, TSMC's Japanese subsidiary Japan Advanced Semiconductor Manufacturing. JASM's sales in fiscal 2025 were JPY 72.42 billion, which translates to about KRW 631.8 billion.

JASM's sales increased 14,240.5% from a year earlier, and the sales scale was about 143 times larger than a year earlier. As the Kumamoto prefecture Kikuyo Town plant operated year-round for the first time and semiconductor mass-production shipments began in earnest, year-round operation and the full-scale start of mass-production shipments led to JASM's sharp sales increase.

Looking at the distribution of sales changes, 3 companies, or 1.9%, saw sales increase by 100% or more from a year earlier. Companies whose sales rose by 10% or more but less than 100% numbered 46, or 29.8%, making that range the largest. The background to the sharp rise in sales was cited as the full-scale operation of production bases and related factors.

While the number of companies with increases was the largest, there were also many companies with declines. Companies whose sales fell by less than 10% numbered 37, or 24.0%.

Semiconductor demand continued to expand, centered on AI and data centers. However, the extent to which companies actually benefited in sales varied considerably by company and product segment.

In the sales-size distribution, companies with sales under JPY 100 million were the most numerous at 36, or 23.3%. JPY 100 million is about KRW 8.7 billion. Companies with sales of JPY 100 million or more but under JPY 500 million numbered 35, or 22.7%.

Companies with sales of JPY 1 billion or more but under JPY 5 billion numbered 28, or 18.1%. Companies with sales of JPY 1 billion or more accounted for 44.1%. Accordingly, the need to expand sales scale also grew.

Companies with sales of JPY 50 billion or more, or about KRW 436.4 billion or more, numbered 18, up 1 from a year earlier. Companies with sales of JPY 1 billion or more numbered 68, accounting for 44.1% of the total.

While the share of companies with large sales was evident, Tokyo Shoko Research said the semiconductor industry requires continuous investment in production facilities and R&D.

Tokyo Shoko Research analyzed that a certain scale of business is needed to improve production efficiency in logic semiconductors, mature-node processes, power semiconductors, sensors and memory. It also said expanding the scale of semiconductor companies is unavoidable in order to improve capital efficiency.

On the profitability front, the number of companies in the black increased. According to Tokyo Shoko Research, 113 companies posted net profit in fiscal 2025, representing 73.3%.

This was an increase of 6 companies from the previous year's 107 profitable companies and a share of 69.4%. However, the share of companies with declining profits stood at 42%.

In Japan's semiconductor industry, there is a view that corporate profitability has become more polarized despite increases in industry-wide sales and profit. There were 66 companies that remained profitable while seeing profit declines, accounting for 42.8%. Although overall industry indicators improved, the share of companies that stayed in the black but saw earnings decline was high, indicating widening gaps within Japan's semiconductor industry.

Tokyo Shoko Research cited rising raw material costs, including silicon wafers and special gases, as factors behind profit declines. It also pointed to higher electricity and utility costs at factories due to rising energy prices, as well as higher labor costs stemming from labor shortages. It further noted companies facing weak demand for general-purpose products and companies failing to pass on increased costs to product prices, highlighting cases in which sales growth did not translate into profit growth.

Total profit rose 5.4% from a year earlier. However, compared with the 500.8% increase in fiscal 2024, the pace of overall profit growth clearly slowed sharply. In other words, total profit increased, but the growth rate compared with the previous year fell markedly.

This trend shows the widening gap within Japan's semiconductor industry. While some companies benefited from high value-added products for AI servers and others benefited from price increases due to supply shortages, there were also companies facing rising costs and companies facing weak demand for general-purpose products. As a result, the difference between companies that benefited and those that did not became more pronounced.

A semiconductor industry expert said the expansion of demand for generative AI and data center semiconductors is the driving force behind the improved results of Japanese semiconductor companies. However, the expert said the main beneficiaries of the deepening sales concentration are large companies. The expert also cited the ability to respond to rising costs such as raw materials, energy and labor, as well as whether those costs can be passed on to selling prices, as key profitability variables, and pointed to responses to cost increases and the effectiveness of price pass-through as factors that will shape future results.

Source: TECHWORLD · Park Kyu-chan
Original: https://www.epnc.co.kr/news/articleView.html?idxno=406774

References

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