Business Summary

The Current State of the Shinko Group

In the semiconductor industry during the fiscal year under review, demand remained strong for automobiles and industrial equipment sectors. On the other hand, the semiconductor market deteriorated significantly in the second half, resulting in a severe market environment due to global inflation, economic slowdown, as well as the decrease in demand for PCs and smartphones against the backdrop of a negative rebound from the special demand for COVID-19, and inventory adjustments, etc.
We received strong orders in the first half on the back of expanding demand for automobiles and industrial equipment, etc. However, in the second half, our operations are largely affected by inventory adjustments and other factors due to the slowdown in the semiconductor market. On the other hand, by anticipating the medium- to long-term expansion of the semiconductor market, in our mainstay flip-chip type packages, we promoted the development of production systems to meet the expected growth in demand for high-performance semiconductors: We began building the new Chikuma Plant (Chikuma City, Nagano Prefecture) and boosted capacity at our Kohoku and Wakaho Plants, both located in Nagano City, Nagano Prefecture. In the area of ceramic electrostatic chucks for semiconductor manufacturing equipment, we also promoted the construction of a new building at our Takaoka Plant (Nakano City, Nagano Prefecture) in 2021, aiming to start operations in fiscal year 2023. In this and other ways, we continued to allocate management resources in growth markets. As the semiconductor market slowed down in the second half, we worked hard to secure orders through aggressive sales activities, focusing on productivity improvements and cost reductions company-wide. Moreover, we reconsidered the timing of operation for some of our capital investments.