I sincerely thank everyone for the exceptional support given to us.
The structures of the economy and society are being significantly changed by the advancement of information communication infrastructure that realizes super high-speed and high-volume communication and the progression of digital transformation (DX) due to the increasing use of artificial intelligence (AI) and Internet of things (IoT). These technologies have the potential to create innovation on a different order of magnitude than ever before. It is expected that the progress of semiconductors will continue as a key technology for achieving this potential. Moreover, the markets for semiconductors are expected to expand in the future, including in the automotive market, where technological developments such as autonomous driving are accelerating as well as in the robotics market where application are expected to be diverse. In addition, semiconductors’ needs are expected to become more sophisticated and diverse as key devices that support the evolution of technologies that is essential for the realization of Green Transformation (GX).
The Shinko Group is committed to developing highly competitive products, based on our interconnection technology that brings the marvelous features and benefits of semiconductor devices into people’s lives. We will strive to provide products and services with high value for customers and to support their success. Through these initiatives, we will pursue our own development and growth.
Furthermore, we are committed to the practice of the SHINKO Way, which embodies the Shinko Group’s corporate philosophy and policies. Through the SHINKO Way, we pursue harmony with stakeholders while promoting various sustainability efforts, including those for climate change.
Business Results for the Fiscal Year Ended March 31, 2024
During the fiscal year under review, the Shinko Group focused on productivity improvements and cost reductions and on winning orders to secure income, despite the semiconductor market struggling to recover due to significant impact from the stagnation in the PC and smartphone markets and from prolonged inventory adjustments. Furthermore, regarding capital investments for these growing markets that we have continuously pursued, we reviewed part of the plan due to the current market situation. However, we continued to allocate management resources in anticipation of medium- to long-term expansion in the semiconductor market and increasing demand for our products in the future. For our flip-chip type packages, which meet the need for semiconductors with higher functionality and speed as well as power saving, we promoted efforts to enhance our production systems, including the construction of the building of the Chikuma Plant (Chikuma City, Nagano Prefecture) as a new production site. Furthermore, a new capital investment plan for the Chikuma Plant regarding next-generation flip-chip type packages for cutting-edge semiconductors has been certified as a “Supply Security Plan” based on the Economic Security Promotion Act, and subsidies have been granted. For plastic BGA substrates, we started the construction of a new building for the Arai Plant (Myoko City, Niigata Prefecture) to increase the production capacity.
As a result, net sales of flip-chip type packages decreased largely due to delayed recovery in demand for PCs and servers, and other factors. Net sales of ceramic electrostatic chucks decreased significantly due to export restrictions on semiconductors and the deterioration of the market. So, overall sales conditions were affected by the market downdraft. As a result of these factors, net sales were 209,972 million yen (down 26.7% year on year). Profits were significantly affected by the drop in sales. Ordinary profit was 27,257 million yen (down 65.4% year on year). Profit attributable to the owners of the parent was 18,609 million yen (down 65.8% year on year).
Outlook
Going forward, the semiconductor industry could see demand recover, including the memory market, on the back of the rapid expansion of AI-based services and other factors. However, the slow recovery of PC, server and smartphone markets and the inventory adjustments of semiconductors could continue even longer. Meanwhile, the importance of semiconductors is increasing as a key technology supporting the digitalization of society and the economy due to the progress of DX and other factors, and the realization of GX, which will achieve both the transition to a decarbonized society with sustainable growth and reduced power consumption due to the significant increase in information and communication traffic. At the same time, global competition is expected to intensify, requiring setting up development and production systems that can adapt rapidly and flexibly to increasingly sophisticated and diversifying market needs and changes in demand. Furthermore, in order to meet the need for even greater higher performance and multi-functionality of semiconductors, the packaging process in semiconductor manufacturing is becoming increasingly important. In particular, it is expected that there will be an increasing demand for semiconductor packages, our main business, as core products that are indispensable for achieving even higher-performance, higher- speeds and greater power savings in semiconductors.
In this environment, the Shinko Group will develop our proactive sales drives to have consistent revenue, further enhancing our sales structure and accurately grasping market environment change. At the same time, we will work hard to improve productivity, efficiency and cut costs, etc. across the board. We have continued to focus on allocating management resources in markets with high growth potential. We will continue our capital investment, watching the market environment, judging the timing and detail appropriately as needed, setting our eyes on medium- to long-term market growth of our products. For our flip-chip type packages, we will arrange a mass-production system at our Chikuma Plant (Chikuma City, Nagano Prefecture) which was constructed December, 2023. For plastic BGA substrates to meet the demand for semiconductor memory with higher-speeds and larger- capacities, we are committed to completing the construction of the new building which has started at the Arai Plant (Myoko City, Niigata Prefecture). Furthermore, we will promote the new capital investment plan at the Chikuma Plant for next-generation flip-chip type packages for cutting-edge semiconductors, including “i-THOP®” that we have developed, to address the needs of the high-performance computing (HPC) market which is set to grow significantly in the medium- to long-term. We will establish new products and new technologies that address market needs ahead of others, working on mass-production and aim for sustainable growth and development, applying the state-of-the-art semiconductor packaging technologies that we have developed, including the development of photonics-electronics convergence devices that, as core devices for building next-generation information communication infrastructures, will dramatically reduce power consumption and achieve super high-speed data processing.
To achieve “Progress without Limits,” the Shinko Group will provide customers in semiconductor markets where continued growth is expected with high-value products and services offering solid value and rooted in customer requirements for function, performance, cost, and quality.
June 2024
Susumu Kurashima
Representative Director of Board, President
