Expanding High-Margin Abrasives and Strengthening Production Capacity

「Fujibo Ehime Co., Ltd. — Mibukawa Head Office Plant (Saijo, Ehime) — Abrasives Business — Abrasive products — Production equipment — 8,700 — 40 — Internal funds and borrowings — November 2025 — October 2028 — Production capacity to increase by 60%」

「The abrasives business, a core business, received steady orders against a backdrop of increased investment demand for advanced semiconductors used in AI-related applications and data centers.」

「As a result, net sales increased by ¥1,535 million, or 16.7%, year on year to ¥10,744 million, while operating income increased by ¥792 million, or 37.3%, to ¥2,918 million.」

「Taiwan Fujibo Precision Materials Co., Ltd. — Zhunan, Miaoli County — R&D Center (Zhunan Township, Miaoli County, Taiwan) — Abrasives Business — Abrasive products — R&D facility — 5,700 — 1,153 — Internal funds and borrowings — August 2024 — April 2027 — Almost none, as the facility is for R&D」

「For the core ultra-precision processing abrasives, orders for semiconductor device applications (CMP) increased due to higher demand for semiconductors used in memory and leading-edge logic associated with the rapid adoption of generative AI, as well as higher inventory levels at some customers in connection with increased production. Silicon wafer applications entered a recovery trend as excess market inventories were gradually cleared. Demand for hard disk applications was also beginning to recover for data centers, while orders for LCD glass applications remained weak as the recent downturn in panel market conditions persisted. As a result, net sales increased by ¥3,487 million year on year to ¥9,209 million, while operating income increased by ¥1,971 million to ¥2,125 million.」

「Taiwan Fujibo Precision Materials Co., Ltd. — R&D Center (Hsinchu, Taiwan) — Abrasives Business — R&D facility — 5,700 — — — Internal funds and borrowings — May 2024 — September 2026 — Almost none, as the facility is for R&D」

「Fujibo Ehime Co., Ltd. — Head Office Plant (Saijo, Ehime) — Abrasives Business — Abrasive products — Production equipment — 1,827 — — — Internal funds — May 2023 — September 2024 — Almost none, as the equipment is for R&D」

「In the current fiscal year, the second year of the plan, the Abrasives Business accelerated its R&D capabilities and expanded production capacity.」

「For the core ultra-precision processing abrasives, orders for hard disk and LCD glass applications declined as some major customers implemented production and inventory adjustments following the reactionary downturn after stay-at-home demand peaked. In contrast, demand for applications such as silicon wafers and semiconductor devices (CMP) expanded as robust semiconductor demand was further boosted by the global semiconductor shortage. As a result, net sales increased by ¥1,170 million, or 16.0%, year on year to ¥8,507 million, while operating income increased by ¥191 million, or 9.7%, to ¥2,178 million.」

「Fixed assets increased by ¥88 million to ¥36,075 million, mainly because property, plant and equipment increased as a result of capital investment in the Abrasives Business and Chemical Products Business.」

「フジボウ愛媛㈱ Headquarters Plant (Saijo City, Ehime Prefecture) Abrasives Business Abrasives products Production equipment ¥2,560 million ¥1 million Equity funds January 2022 April 2024 For research and development equipment, almost none ¥1,470 million ¥16 million Same as above August 2021 March 2023 For quality improvement and rationalization, almost none」

「フジボウ愛媛㈱ Headquarters Plant (Saijo City, Ehime Prefecture) Abrasives Business Research and development equipment ¥2,068 million — Equity funds January 2022 September 2023 For research and development equipment, almost none」

「フジボウ愛媛㈱ Headquarters Plant (Saijo City, Ehime Prefecture) Abrasives Business Abrasives manufacturing equipment ¥297 million — Equity funds October 2021 April 2022 For quality improvement and rationalization, almost none ¥370 million — Same as above November 2021 June 2022 For research and development equipment, almost none」

「Demand for the core abrasives for ultra-precision processing expanded in silicon wafer and semiconductor device applications, including CMP, driven by tight global semiconductor supply and demand and increased demand for semiconductors used in 5G communications, automobiles, various sensors, PCs and smartphones. Orders from some customers for hard-disk applications declined. In LCD glass applications, demand for large panels remained firm, while demand for small and medium-sized panels remained weak. In terms of profit, the Company was unable to exceed the previous year's level because depreciation increased following the start-up of the new plant.」

「In the abrasives business, the Company began operating new plants in Japan and overseas to meet growing orders,」

「As a result, revenue increased by ¥1,003 million, or 11.4%, year on year to ¥9,809 million, and operating profit increased by ¥926 million, or 48.2%, to ¥2,848 million.」

「Under these operating conditions, in the medium-term management plan “加速17-20,” the Fujibo Group strengthened research and development capabilities and production capacity in the abrasives and chemicals businesses, while working to reduce costs, improve efficiency and increase profitability. As a result, revenue increased by ¥643 million, or 10.9%, year on year to ¥6,518 million, and operating profit increased by ¥731 million, or 57.6%, to ¥2,002 million.」

「The core abrasives for ultra-precision processing expanded in silicon wafer and semiconductor device applications, including CMP, despite concerns about delays in component procurement and restrictions on economic activity caused by COVID-19. Demand for semiconductors used in communications infrastructure, automobiles, various sensors, PCs and smartphones increased amid tight global semiconductor supply and demand, and customers also built up inventories. Hard-disk applications continued to benefit from firm data-center demand, while LCD glass applications performed steadily on demand for large panels. As a result, revenue increased by ¥743 million, or 27.2%, year on year to ¥3,477 million, and operating profit increased by ¥621 million, or 123.1%, to ¥1,126 million.」

「Oita Plant (Oita City, Oita Prefecture) Same as above ¥5,175 million ¥2,394 million Same as above April 2018 October 2020 Increase in production capacity and BCP measures」

「Property, plant and equipment increased by ¥875 million from the end of the previous consolidated fiscal year to ¥33,287 million, mainly due to capital investment in the core abrasives and chemicals businesses.」

「As a result, revenue increased by ¥529 million, or 9.9%, year on year to ¥5,875 million, and operating profit increased by ¥221 million, or 21.1%, to ¥1,270 million.」

「The core abrasives for ultra-precision processing performed steadily in applications for semiconductor devices, including CMP, despite concerns about the impact of US-China trade friction. Hard-disk applications declined due to temporary customer inventory adjustments, while demand for LCD glass applications recovered. Costs for testing and prototyping at the new plant in Taiwan, which began operations, also increased.」

「The Fujibo Group made total capital investments of ¥4,777 million, mainly in the abrasives and chemicals businesses, to improve quality and increase capacity, rationalize and streamline operations, and conduct research and development of new products. Capital investment in the abrasives business was primarily directed at installing and upgrading production equipment related to abrasives for ultra-precision processing at フジボウ愛媛㈱ and Taiwan Fujibo Precision Materials Co., Ltd., to increase production capacity and improve quality and support research and development.」

「Property, plant and equipment increased by ¥1,677 million from the end of the previous consolidated fiscal year to ¥30,926 million. This was mainly due to an increase in tangible fixed assets resulting from capital investment in the abrasives business.」

「フジボウ愛媛㈱ Oita Plant (Oita City, Oita Prefecture) Abrasives Business Abrasives manufacturing equipment ¥5,175 million ¥25 million Equity funds and borrowings April 2018 July 2020 Increase in production capacity and BCP measures」

「Property, plant and equipment increased by ¥323 million from the end of the previous consolidated fiscal year to ¥29,571 million. This was mainly due to an increase in tangible fixed assets resulting from capital investment in the abrasives business.」

「The Fujibo Group made total capital investments of ¥4,766 million, mainly in the abrasives and chemicals businesses, to improve quality and increase capacity, rationalize and streamline operations, and conduct research and development of new products. Capital investment in the abrasives business was primarily directed at installing and upgrading production equipment related to abrasives for ultra-precision processing at フジボウ愛媛㈱, to increase production capacity and improve quality and support research and development.」

「Property, plant and equipment increased by ¥2,417 million from the end of the previous consolidated fiscal year to ¥29,105 million. This was mainly due to an increase in tangible fixed assets resulting from capital investment in the abrasives business.」

「As part of the BCP (business continuity plan) for the abrasives business, the Company plans to acquire land for construction of a plant in Oita City, Oita Prefecture. The acquisition price is ¥1,880 million, to be funded with equity funds and borrowings. The acquisition is scheduled for October 2017.」

「Taiwan Fujibo Precision Materials Co., Ltd. Headquarters Plant (Tainan City, Taiwan) Abrasives Business Abrasives manufacturing equipment ¥1,553 million Equity funds and borrowings August 2017 July 2018」

「Under these operating conditions, the Fujibo Group strengthened its sales, development and production capabilities, centered on the three priority businesses of abrasives, chemicals and textiles identified in the medium-term management plan “邁進14-16,” while also undertaking structural reforms to improve profitability. As a result, for the cumulative third quarter of the current fiscal year, revenue increased by ¥3,690 million, or 13.1%, year on year to ¥31,968 million, operating profit increased by ¥3,317 million, or 119.2%, to ¥6,099 million, and ordinary profit increased by ¥3,369 million, or 117.0%, to ¥6,248 million.」

「The following are the newly finalized plans for major capital expenditures during the cumulative second quarter of the current fiscal year.」

「Under these operating conditions, the Fujibo Group strengthened its sales, development and production capabilities, centered on the three priority businesses of abrasives, chemicals and textiles identified in the medium-term management plan “邁進14-16,” while also undertaking structural reforms to improve profitability. As a result, for the first quarter of the current fiscal year, revenue increased by ¥1,269 million, or 13.6%, year on year to ¥10,606 million, and operating profit increased by ¥1,474 million, or 188.3%, to ¥2,257 million.」

「The Company is introducing the latest product evaluation and inspection equipment compatible with cutting-edge and next-generation processes, thereby improving customer satisfaction and expanding high-margin fields. It is also using its marketing capabilities to uncover demand for new applications, mainly for peripheral materials used with abrasives, while responding to urgent customer requirements by strengthening its research and development division and linking this to higher revenue. In addition, it added a production line at the Kosakai Plant of フジボウ愛媛株式会社 to meet growing orders.」