According to a news report from MoneyDJ on October 27th, due to slow demand recovery, Ibiden, a major Japanese IC substrate manufacturer, has revised down its financial forecast and delayed the start of production for a new IC substrate plant by two years.

In its financial report announcement on October 26th, Ibiden stated that the overall performance of the electronics division (including PCB and IC substrates) has been challenging due to a slowdown in demand for PC applications and sluggish demand for data center servers. However, strong orders for AI servers have performed better than expected in terms of revenue and profits for the first half of this year (April to September 2023). Although the overall order environment for the electronics division is expected to show a gradual recovery, the demand for high-performance IC substrates for servers is slower than initially anticipated. Therefore, Ibiden has revised down its consolidated revenue target for the current fiscal year (April 2023 to March 2024) from the original estimate of 400 billion yen to 380 billion yen (a year-on-year decrease of 9.0%), and its consolidated operating profit target from 5.2 billion yen to 4.9 billion yen (a year-on-year decrease of 32.3%). The consolidated net profit target remains unchanged at 3.3 billion yen (a year-on-year decrease of 36.8%), benefiting from the depreciation of the yen.

In the first half of this year (April to September), Ibiden's consolidated revenue declined by 12.1% year-on-year to 187.64 billion yen, its consolidated operating profit decreased significantly by 41.9% to 24.07 billion yen, and its consolidated net profit decreased significantly by 43.8% to 17.89 billion yen. These figures exceeded the company's original estimates of 175 billion yen, 1.5 billion yen, and 800 million yen for revenue, operating profit, and net profit, respectively.

During the April to September period, Ibiden's electronics division (including PCB and IC substrates) saw a significant decrease in revenue of 23.6% year-on-year to 102.58 billion yen and a drastic decline in operating profit of 54.9% to 15.99 billion yen. On the other hand, the ceramic division (including automotive exhaust filters, DPF, and other products) experienced a growth in revenue of 8.6% year-on-year to 48.11 billion yen and a significant increase in operating profit of 49.4% to 5.757 billion yen.

According to Nikkei News, Ibiden's president, Takeshi Aoki, stated during an online press conference held on October 26th that the start of production for the new IC substrate plant under construction in Ogaki City, Gifu Prefecture, will be delayed from the originally planned fiscal year 2024 to the fiscal year 2026. The main reason for the delay is the restraint on investment by major IT companies and the slow recovery in demand for general-purpose products used in servers.

Ibiden is investing 180 billion yen in the Kawamura Industrial Site in Ogaki City to build the new IC substrate plant. In addition, to meet the strong demand for AI servers, the IC substrate plant located in Ono-cho, Ogaki City, is scheduled to start production in the planned fiscal year 2025.

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Source: MoneyDJ news

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