- Q1. Explain the impact of one-time expenses.
- A1. In FY March 2026, we expect to record one-time expenses of around 2.3 billion yen in the second quarter, around 7.0 billion yen in the second half, and around 10.0 billion yen on a full-year basis. Most of the 2.3 billion yen expensed in the second quarter are expenses related to the reorganization of overseas manufacturing bases for aluminum electrolytic capacitors. These expenses reflect measures to strengthen our position in response to growing demand for AI data centers. On a full-year basis, expenses related to aluminum electrolytic capacitors are expected to amount to 3.0 billion yen, with the remainder expected to be recorded in the fourth quarter. In the second half, the largest one-time expense we expect to record is around 6.0 billion yen related to the EV power supplies business, which we announced we are going to transfer in September 2025.
- Q2. Compared to the upward revisions of your full-year projections, your second-half projections seemed cautious. Explain the intricacies of profit in the first half and the second half.
- A2. If we compare the first and second halves, we project that total net sales in the second half will be mostly unchanged from the first half. By segment, we expect sales in the Passive Components segment to be 4~7% higher in the second half than in the first due to expansion of sales to the automotive market. In the Sensor Application Products segment, second-half sales are expected to lower than the first-half level due to the impact of seasonality on smartphone sales. We expect lackluster sales in the fourth quarter in particular, with second-half sales expected to be 5~8% down on the first half. In the Magnetic Application Products segment, sales are expected to be 17~20% up on the first half, reflecting strong demand for HDD heads and increased sales for both suspensions and heads. In the Energy Application Products segment, we anticipate a 2~5% sales decline due to impact of seasonality on smartphone sales. Fourth quarter sales will likely be even lower than third quarter sales.
Operating profit is expected to be just under 100.0 billion yen in the second half. Foreign exchange rates will be slightly more favorable but given that one-time expenses will increase by around 5.0 billion yen and property taxes of around 4.0 billion yen in total will be incurred in the fourth quarter, in the second half expenses will be up around 10 billion yen on the first half. By segment, in the Passive Components segment, we expect increases in sales and profit excluding one-time expenses. We expect an increase in profit comparable to the increase in sales. In the Sensor Application Products, we forecast a drop in profit of a similar level to that in sales, reflecting decline in highly profitable sales under the impact of seasonality. In the Magnetic Application Products segment, we assume that sales will grow, but we do not expect much of a profit increase on the higher sales due to increased expenses including property taxes. The segment that will show a significant profit decrease is the Energy Application Products segment. We have factored in the impact of rising material prices in addition to decreased sales due to seasonal factors.
- Q3. Do you not plan to resume transactions with captive manufacturers for HDD heads? Is there a problem with your suspension supply capacity?
- A3. We are in the process of considering the potential of business with captive manufacturers. Our suspension supply capacity has increased. We have increased our supply capacity by around 15% and are meeting strong demand as far as possible.
- Q4. What will happen to the component ratios of silicon-anode products and metal-cased products next fiscal year?
- A4. We feel that next fiscal year the market as a whole will see modest growth. Our third-generation silicon-anode products were launched from the first quarter of this fiscal year. Next fiscal year, while launching next-generation products, we will also expand sales of previous generation products in a bid to increase sales volume. We also intend to expand metal cased products over the coming fiscal years. Other areas we are putting effort into besides increasing the adoption of products in smart-phones are smart glass and wearable devices. Features of our metal-cased products include that they can achieve high energy density in a limited space, they are lightweight, and their shape can be flexibly adapted. Additionally, the metal-cased products we are working on also meet needs for high levels of safety. The ratio of silicon-anode products is something we will consider going forward; however, next fiscal year we will further increase the ratio from 15% this fiscal year.
- Q5. You said that you would tap into demand for data centers. What progress has been made since then?
- A5. We are getting a very high level of inquiries about aluminum electrolytic capacitors for the power supply units of data centers. The adoption of MLCCs in high-voltage power lines has also increased. Especially for aluminum electrolytic capacitors, we are taking steps in preparation for next fiscal year, including expanding capacity. We have also had inquiries about high-current capability inductors for GPUs and are in the process of considering these.
- Q6. How will you expand the adoption of MEMS microphones over the coming years?
- A6. We expect adoption to become more widespread as we head from this fiscal year into next. The ratio of specialty models for design and front-end process, which is also a feature of our business model, will increase next fiscal year. To begin with, we will supply them to our one existing customer. Later, we intend to supply them to other customers.
