Whether semiconductors for AI servers can continue to drive company-wide growth in H1 FY2027

In Q1 of FY2027, consolidated revenue was ¥12,572 million, up 39.7% year on year, and operating profit was ¥2,329 million, up 157.2%. Segment revenue was ¥7,878 million for the Semiconductor business, ¥3,959 million for the Energy Saving Solution business, ¥457 million for the Digital Communication business, and ¥276 million for the Life Science business. Semiconductors and automotive-related components accounted for most of the company-wide revenue growth.

Revenue in the Semiconductor business increased 61.2% year on year to ¥7,878 million, while segment operating profit increased 132.2% to ¥2,012 million. The segment operating margin was approximately 25.5%, and the segment accounted for approximately 86% of consolidated operating profit of ¥2,329 million. The Q1 explanation cited increased demand for GPU-, ASIC-, and CPU-related products for AI servers, automotive applications, and mobile applications. It will therefore be important to assess whether the customer base for AI server sockets continues to expand, rather than viewing the result as simply a recovery in volumes.

The full-year forecast is revenue of ¥48,000 million and operating profit of ¥6,400 million, with Q1 progress rates of 26.2% and 36.4%, respectively. Profit is ahead of revenue on a simple equal-quarter allocation basis, but the company did not revise its earnings forecast as of Q1. Whether H1 cumulative revenue reaches ¥24,000 million and operating profit reaches ¥3,200 million, representing 50% progress, will therefore be the first benchmark for assessing the sustainability of any outperformance against plan.

As of Q1, the company had not disclosed orders received, order backlog, regional revenue, or sales amounts by GPU, ASIC, and CPU. In the H1 results, it will be necessary to assess whether higher server demand is based on continuing orders for mass-production projects rather than customer inventory accumulation or a temporary ramp-up. If standalone Q2 revenue exceeds Q1 revenue of ¥7,878 million and the margin does not deteriorate materially, the potential for an upside to the full-year forecast will become a focus.