Sluggish Surface Treatment Chemicals Market and Corporate Capital Investment Amid Price Competition

「Against a backdrop of increased investment in package substrates accompanying the rapid expansion of the generative AI market, we made progress in acquiring new customers in China, among other initiatives, and chemicals for passive components performed well. In addition, demand for chemicals for printed circuit boards recovered.」

「In the surface-treatment chemicals segment, we focused on promoting sales of high-value-added products, namely chemicals for fine-line formation, plating chemicals for passive components and chemicals for semiconductor electrode formation. However, sales struggled as demand recovery among major customers was delayed both in Japan and overseas. In the surface-treatment equipment segment, equipment orders declined substantially as customers' capital investment cycle had run its course.」

「In the surface-treatment chemicals segment, although recovery in the printed circuit board segment was delayed, the segment performed well on growing demand in the semiconductor and electronic component markets.」

「The surface-treatment chemicals segment has focused its sales efforts on the printed circuit board, electronic component and semiconductor segments, but the market had remained sluggish for the past 2 years due to inventory adjustments and other factors. In the second quarter, chemicals for semiconductor electrode formation and plating chemicals for passive components began to recover, while the printed circuit board market remained between flat and slightly recovering, with growth very limited.」

「As the printed circuit board and electronic component-related markets stagnated due to a global supply-demand imbalance, sales of chemicals for fine-line formation and plating chemicals for passive components remained sluggish.」

「As the printed circuit board and electronic component-related markets stagnated due to a global supply-demand imbalance, sales of chemicals for fine-line formation and plating chemicals for passive components remained sluggish.」

「In the surface-treatment chemicals segment, we focused on promoting sales of our core products, including chemicals for semiconductor electrode formation, chemicals for fine-line formation and plating chemicals for passive components. However, performance was sluggish due to weak target markets and the impact of higher raw-material and utility costs.」

「In the surface-treatment chemicals market, the electronic component market, including our core segments of semiconductors and passive components, rapidly deteriorated toward the second half of the fiscal year. In addition, intermittent concerns over the procurement of components and raw materials of all kinds arose worldwide, while many raw-material prices and logistics costs tended to rise, creating increasingly strong headwinds in the supply chain on the manufacturing and distribution sides and resulting in a challenging environment.」

「In the surface-treatment equipment segment, as component shortages worsened due to changes in the external environment, we focused on procuring raw materials to meet delivery deadlines.」

「Meanwhile, in addition to the prolonged difficulty of procuring components of all kinds, including semiconductors, supply-chain uncertainty has intensified due to rising raw-material prices and logistics costs.」

「In the surface-treatment equipment segment, as materials and components, particularly semiconductors, became scarce worldwide, we focused on rigorous delivery-date management to avoid delays and performed steadily.」

「The surface-treatment chemicals segment performed steadily on growing demand in the semiconductor and electronic component markets. In the surface-treatment equipment segment, both revenue and operating profit performed steadily, as the conversion of drawings into approved designs contributed to order-generating activities.」

「In the surface-treatment equipment market, manufacturers entered a busy period, but lead times lengthened and supply shortages also emerged in the semiconductor field. The impact on the business therefore requires close monitoring.」

「As related markets were invigorated by the expansion of the 5G market and the increase in working from home, sales of our core products rose and the surface-treatment chemicals segment performed well.」

「In the surface-treatment chemicals market, measures such as entry and exit bans and restrictions on going outdoors continued worldwide as the novel coronavirus spread globally. Although some countries and regions began to reopen their economies, a sense of paralysis persisted amid fears of second and third waves. In addition, shortages of vessels and containers for maritime transport during exports increasingly affected the supply chain.」

「In the chemicals market, in addition to US-China trade friction, the spread of the novel coronavirus caused related markets, particularly the automotive industry, to stagnate, increasing uncertainty about the global outlook. Meanwhile, demand is expected to increase for high-speed, high-capacity mobile communications systems.」

「As a result, sales of copper-plating additives to South Korea and seed-layer etching products for wafers to Europe remained strong. In contrast, the domestic UBM market remained sluggish despite continued robust capital investment by semiconductor manufacturers.」

「In the surface-treatment chemicals market, the printed circuit board segment ended weakly as the smartphone market, which had driven the industry, contracted and was affected by US-China trade friction. In addition, the expected 5G (fifth-generation mobile communications system) failed to invigorate the market, resulting in a challenging environment.」

「As a result, US-China trade friction and deteriorating Japan-South Korea relations led to sluggish smartphone shipments and signs of weakness in automotive-mounted circuit boards, causing revenue to remain sluggish.」

「In the surface-treatment chemicals market, the printed circuit board market remained uncertain, as sales of mobile devices that had driven the market began to show signs of weakening, compounded by the impact of US-China trade friction. In addition, the expected 5G (fifth-generation mobile communications system) had yet to have a tangible impact, and difficult conditions continued in the first half.」

「As a result, sales to the printed circuit board and electronic component markets remained sluggish, as existing sales declined due to lower operating rates at overseas customers amid deteriorating market conditions, and delays in acquiring new customers also had an impact.」

「Against this backdrop, market conditions remained strong both in Japan and overseas, and investment in emerging markets such as Vietnam, Myanmar and India was also notable.」

「In the surface-treatment chemicals segment, we worked to expand sales of new copper-plating additives for printed circuit boards and to transition and expand sales of various process chemicals acquired from Hitachi Chemical Co., Ltd. As a result, despite negative factors including sluggish sales of new smartphone models, sales of chemicals for printed circuit boards and semiconductor-related chemicals grew both in Japan and overseas and performed well. In the surface-treatment equipment segment, amid weak capital investment, we worked to improve profitability by strengthening parts and maintenance sales and producing at the optimal locations within the Group, while also entering new fields requiring horizontal conveying equipment.」

「In the surface-treatment equipment market, overall industry capital investment remains sluggish, as smartphone shipments, which have driven the printed circuit board industry, have been slowing, while shipments of the new models we had expected also fell far short of initial forecasts.」

「As a result, market conditions had been improving substantially since the second half of the previous fiscal year, and we had planned for them to remain at that level during the current fiscal year. However, a slight pause emerged in the market and some manufacturers experienced delays in adopting our chemicals. Consequently, revenue exceeded the same period of the previous year, but operating profit remained sluggish.」

「In the surface-treatment chemicals market, chemicals for printed circuit boards and electronic components performed well, particularly among overseas manufacturers, driven by the steadily growing smartphone market. In the surface-treatment equipment market, investment sentiment remained weak not only in Japan but also in South Korea, where many of our major users are located, resulting in extremely challenging conditions.」

「In the surface-treatment chemicals segment, we focused on parts sales and maintenance orders as equipment sales remained challenging, with capital investment by major customers falling further than expected.」

「In the surface-treatment chemicals market, sales of chemicals for printed circuit boards remained sluggish due to shifts in the competitive landscape for smartphones overseas and customer inventory restraint ahead of some new models. In the equipment segment, the domestic market also remained challenging, as companies other than a few continued to limit investment.」

「Overseas sales benefited from new adoption at a major printed-wiring-board manufacturer, but overall sales fell short of plan partly because an anticipated large project was postponed. Business remained sluggish amid the slowdown in China's overall economy. Development of both fine-circuit formation technology and thick-copper etching technology was behind the initial plan.」

「The environment was difficult for chemicals for printed wiring boards because of the slowdown in smartphone-market growth and the fact that capital investment was limited to some companies.」

「In the surface treatment chemicals business, we focused on expanding overseas operations and on further product development for chemicals used in electronic components and automotive components. As a result, we secured new adoption at major domestic manufacturers, among other achievements, but business conditions remained extremely difficult because adoption of new products was delayed. In the surface treatment equipment business, we advanced development of new equipment effective for the next generation of fine-circuit formation required by customers in order to differentiate ourselves from competitors, and focused on expanding sales channels with value-added equipment and recovering prices that had declined. As a result, transactions with local Chinese companies remained firm, but overall business was sluggish because of weak capital investment by domestic companies.」

「The surface treatment chemicals market was difficult. Demand for chemicals for printed circuit boards leveled off as smartphone demand stabilized, while capital investment during the current period was limited to some companies because many companies had concentrated their capital investment in the previous period.」