Kokusai Electric Reports 40% Revenue Jump on AI Demand

Kokusai Electric reported a substantial 40.0% year-over-year increase in revenue for the first half of fiscal year 2027, reaching ¥164.043 billion, fueled by robust investment in semiconductor devices spurred by the expanding artificial intelligence (AI) sector. This surge in demand translated into a 62.1% year-over-year increase in operating profit, reaching ¥36.8 billion.

The company’s strong performance is directly linked to the ongoing expansion of AI-related applications, specifically in data centers, which are driving demand for high-performance Logic and DRAM devices. While demand remains moderate for consumer electronics and automotive applications, the AI sector is demonstrably accelerating investment in semiconductor manufacturing equipment – an effect Kokusai Electric is capitalizing on. The rise in sales is attributed to both increased device sales and service revenue.

Despite the revenue and profit growth, the company’s gross profit margin declined due to shifts in product mix. However, this was offset by the overall increase in sales, leading to improved profitability ratios overall. Kokusai Electric maintains its full-year earnings forecast, anticipating continued growth driven by the semiconductor market, particularly in AI-related areas. The company anticipates that its strong market share in key areas, such as batch ALD equipment, will allow it to outperform the broader market.

The company’s net cash position increased to ¥69.7 billion, up ¥13.2 billion from the prior period, reflecting strong cash flow from operations. Kokusai Electric is maintaining its commitment to research and development, with investment levels remaining consistent. Looking ahead, the company expects the wafer fab equipment (WFE) market to continue its double-digit growth trajectory, largely driven by demand for AI-related devices, and aims to exceed this market growth.