Kyocera's president, Hideo Tanimoto, said in an interview with the Nihon Keizai Shimbun that Kyocera will acquire a company with sales of 200 billion yen by March 2026. As for the target industry of the acquisition, he said that it is likely to be electronic parts and mechanical tools enterprises.
In its mid-term management plan for the period ending March '26, which was announced in May, Kyocera proposed to invest up to JPY 500 billion in M&A (mergers and acquisitions) and the purchase of the company's **. Tanimoto said, "We want to acquire a company with sales of 200 billion yen. Although the timing has not yet been decided, it is hoped to be realized by March 2026. ”
In 2021, Kyocera acquired the American startup SLD Laser Corporation (now Kyocera SLD Razer) for about 50 billion yen (at the time). In 2022, ROHM acquired its tantalum capacitor business through its U.S. subsidiary.
Commenting on M&A over the past one or two years, Tanimoto said, "Small-scale acquisitions are also burdensome with large amounts of manpower after becoming a subsidiary. Some subsidiaries incurred additional charges around annuity debts. At present, priority will be given to the acquisition of companies with "well-established internal systems and large scale".
Kyocera has set a target of 2.5 trillion yen in consolidated sales for the fiscal year ending March '26 compared to March '23. The "Core Components" business, which focuses on semiconductor-related components, performed well, while the pre-tax profit of the "Electronic Components" business, such as capacitors for smartphones, decreased by 10% compared to the previous quarter, and the "Solutions" business, which includes machine tools, performed poorly by 4%.
Kyocera is trying to acquire electronic components and machine tool companies that have been affected by China's economic slowdown and the downturn in the smartphone market through major mergers and acquisitions. In addition, the company has started the first domestic expansion of its semiconductor-related parts plant in Isahaya City, Nagasaki Prefecture, Japan, in about 20 years, and is accelerating growth by increasing capital investment.
Kyocera will build a new plant for precision ceramics for semiconductor equipment
In the field of electronic information, the demand for key components in the industrial chain in each field is expected to increase further due to the spread of 5G base stations, the miniaturization and high-functionality of communication terminals such as smartphones and semiconductor-related devices, and the advancement of advanced driver support systems (ADAS) and EV technologies for automobiles.
In response to these demands, in April this year, Japan's Kyocera announced that by 2028, the company will invest 62 billion yuan to build a factory in Isahaya City, Nagasaki Prefecture (Kyocera Co., Ltd. Nagasaki Isahaya Factory), which covers an area of 150,000 square meters and will produce precision ceramic parts and semiconductor packaging products widely used in semiconductor manufacturing.
Renderings of the new factory, **Kyocera official website
In the semiconductor industry, manufacturing equipment has an extremely important strategic position. The key semiconductor equipment represented by lithography machine and etching machine is the product of high integration of modern technology, and its design and manufacturing process can reflect the highest level in many related scientific fields, including materials and machining.
Ceramic components in semiconductor manufacturing, Kyocera official website
Especially with the development of semiconductor process nodes to the few nanometer level, chip production is becoming more and more complex, which makes lithography systems more and more demanding on components. For example, for materials, the key equipment of semiconductor manufacturing requires parts and components to have the characteristics of light weight, high strength, high thermal conductivity and low thermal expansion coefficient, and be dense and uniform without defects. Compared with metal parts, ceramics are more resistant to thermal expansion and corrosion, so they are widely used in semiconductor processing equipment.
Kyocera started with fine ceramics technology and is currently one of the world's leading companies in the production of high-quality fine ceramics, and can produce a comprehensive range of precision ceramic parts for semiconductor equipment. It is understood that the plant will start construction in October 2023, start production in 2026, and achieve an annual output value of 25 billion yuan after full operation.
The recovery of semiconductors is slow, and Kyocera has cut financial measurement and capital expenditure
The semiconductor market is recovering slowly, and Japan's passive component manufacturer Kyocera (Kyocera) revised its financial forecast and profit will turn from growth to contraction, and cut capital expenditures, but with the expectation of bottoming out, Kyocera's stock price soared today, hitting a new high this year.
Kyocera announced a press release in November that due to the slower recovery of the semiconductor market than originally expected, resulting in a decline in sales of related parts, this year's (April 2023-March 2024) consolidated revenue target from the original estimate of 21 trillion yen (37%)05 trillion yen, an annual increase of 12%, and the consolidated profit target increased from 147 billion yen (up 14.year year.).4%) to 120 billion yen, down 6.5% y/y6%, and the consolidated net profit target also increased from 145 billion yen (up 13.y year.).3%) to 123 billion yen, down 3.0 percent y/y9%。
Kyocera lowered its revenue target for this year's core components division (including IC substrates, ceramic substrates, and fine ceramics for semiconductor manufacturing equipment) from 620 billion yen to 567 billion yen, and lowered its profit target from 86 billion yen to 65 billion yen. The revenue target for the Electronic Components Division (including MLCCs, quartz components, etc.) was lowered to 358 billion yen from 390 billion yen, and the profit target was lowered to 24.5 billion yen from 55 billion yen.
Kyocera has slashed its capital investment (capital expenditure) target for this year by 105 billion yen from the original estimate of 275 billion yen to 170 billion yen.
According to Nikkei, Kyocera President Hideo Tanimoto said at a press conference held on the 1st that the demand for artificial intelligence (AI) and memory has eased and recovered after bottoming out in July and September. Hideo Tanimoto pointed out that the semiconductor market will truly recover in 2025, and the amount of equipment investment that will be reduced this year will be invested after next year.
Kyocera also announced its financial results for the last quarter (July-September 2023): consolidated revenue fell 3% year-on-year to 505.9 billion yen, consolidated operating income shrank 19% to 28.3 billion yen, and consolidated net profit fell 25% to 19.1 billion yen.
Last quarter, Kyocera's core components segment's revenue fell 6% year-on-year to 148.3 billion yen, and its operating income fell 35% to 16.7 billion yen. In the Electronic Components Division, revenue shrank 10% to 90.2 billion yen, while revenue plummeted 60% to 5.8 billion yen.
Kyocera exits the consumer mobile phone market
In addition, according to the data, Japan's smartphone shipments have shrunk for six consecutive quarters, of which Apple's iPhone shipments have increased for the first time in five quarters, and the market share has broken through the 5% mark, while Android smartphone shipments have seen a double-digit decline.
As far as individual smartphone factories are concerned, the market share of Apple's iPhone in Q3 broke through the 5 mark and was as high as 51The market share of 0% continued to be the leading smartphone in Japan, and the market share increased by 3 percentage points compared with the same period last year; Google smartphone shipments were 980,000 units, with 143% of the market share jumped to the second largest factory; The next order is Sharp's 125% (shipments of 860,000 units), Samsung's 65% (450,000 sticks) and 53% (370,000 pieces). Sony was among the top 5 exits in Q3.
FCNT announced on May 30 that it had filed for bankruptcy, mainly due to the intensification of competition in smartphone sales, coupled with the depreciation of the yen, the global chip shortage and other factors that led to a sharp rise in costs and expenses, resulting in a sharp deterioration in profits and capital scheduling.
In addition to FCNT's bankruptcy filing, Japan's Kyocera also indicated that it will withdraw from the consumer smartphone market by the end of March 2025, after which only Sony and Sharp remain in Japan's smartphone business.
As early as 1989, Motorola, which was still the "boss" of the industry at that time, launched a mobile phone called "Microtac". It was also the first model in the world to place the keyboard under the clamshell receiver, making the Microtac one of the smallest phones of its time, far more stylish than the mainstream Big Brother. For a while, the clamshell design also quickly became popular, and the traditional "big brother" was branded as "outdated" by consumers.
But what Motorola didn't expect at the time was that not long after the launch of the Microtac, a Japanese manufacturer would create a "thin and light" mobile phone with a relatively more "traditional" straight board design in the same year.
As a result, the myth that "clamshell machines must be thinner" was shattered after only a few months. What's even worse is that the Japanese company that broke it is even a "novice" who designs and manufactures mobile phones for the first time.
This Japanese company is none other than Kyocera. And on May 16, 2023, they officially announced their decision to withdraw from the consumer mobile phone market.
Why can't Kyocera's mobile phone work? Because most of Kyocera's consumer-grade mobile phone products feel more "alternative".
For example, as early as 1999, Kyocera launched the world's first model equipped with a camera, the VP-210. However, this camera can only be used for visual functions, not for taking pictures. However, the visual ** itself has a high **, which also makes the VP-210 not only miss the name of "the world's first camera phone", but also its own sales are quite poor.
In 2011, Kyocera launched a dual-screen smartphone Echo with a side sliding lid shape, and it is widely regarded as the originator of the current folding screen model. In it, we can already see some typical use cases of today's popular folding screen mobile phones, such as typing on one screen, displaying documents on the other, or putting two screens together for display, etc.
And in 2018, Kyocera launched a touchscreen mobile phone that is known as "the world's thinnest and lightest". It uses an e-ink screen, does not support any camera functions, and does not support any smart features. But it can't be denied that it does weigh only 47 grams, which is much lighter than the mainstream models at the time.
In addition, Kyocera is also particularly "obsessed" with the waterproof and anti-drop technology of mobile phones. For example, they've introduced flip-top models that claim to be military-grade rugged, and they've also launched smartphones that are said to be "real" to be cleaned with soap and can be touched with wet hands. Coupled with a variety of rugged three-proof mobile phones for field exploration, it is not difficult to see Kyocera's product design ideas, and the outstanding one seems to be an "unconventional road".
Under this line of thinking, although Kyocera mobile phones seem to be able to "mismatch competition" with mainstream brands, they have actually created their target consumer group, which is unlikely to be too big from the beginning, and sales are destined to be too high. As a result, as long as mainstream manufacturers make a little effort in the drop resistance and waterproof performance of their products, it is easy to snatch a large number of Kyocera's customers, making it difficult for this old and alternative mobile phone manufacturer to continue on the consumer side.
Kyocera also bluntly said the reasons for withdrawing from the market: fierce competition from competitors such as China and South Korea, it is difficult to maintain product differentiation while maintaining profits, as well as the elongation of consumer replacement cycles, and the overall shrinking mobile phone market. Kyocera President Hideo Tanimoto also said, "We can no longer find a market that is suitable for the masses. ”
Looking at today's Japanese mobile phone industry, it seems that except for Sony, almost all of them are "wiped out", including Panasonic, Toshiba, NEC, etc. have announced their withdrawal from the mobile phone market, Sharp was taken over by Foxconn, and Fujitsu's mobile phone business was sold to a capital company. After Mitsubishi, Sharp, Toshiba, NEC, Fujitsu and other manufacturers have abandoned or sold their mobile phone business, there are few local mobile phone manufacturers left in Japan.