Sumco Revisions Forecasts Upward on Cost Improvements, Asset Sale

Sumco revised its full-year forecasts upward following a third-quarter report revealing a ¥7.42 billion net loss—an improvement over prior expectations driven by cost reductions and a ¥13.67 billion gain from the partial sale of its stake in FORMOSA SUMCO TECHNOLOGY CORPORATION (FST). The company also increased its projected annual dividend to ¥20 per share.

While the reported loss underscores ongoing challenges, the upward revision reflects successful cost-cutting measures and the positive impact of the asset sale. Sumco cited improvements in production efficiency and a favorable impact from AI-related demand as key factors influencing the revised outlook. However, the company noted that the exclusion of FST’s performance from future earnings projections will impact overall results.

The decision to sell a portion of its FST holdings, a joint venture with Formosa Plastics Group, stems from a strategic reassessment of capital allocation. This move, combined with the planned closure of a wafer production facility in Miyazaki, Japan, signals a shift towards optimizing its portfolio and focusing on high-margin products. A special loss of ¥3.778 billion was recognized due to the facility closure.

Despite the positive revisions, Sumco maintains a cautious outlook, citing ongoing geopolitical risks and fluctuating material costs. The company anticipates continued strong demand for silicon wafers, particularly for advanced logic and memory applications driven by the expansion of AI technologies. However, it acknowledges that capacity constraints and rising prices may limit the pace of growth. The company refrained from providing a comprehensive full-year earnings forecast, citing the volatile nature of the semiconductor industry and the recent change in its consolidation of FST.