JSR Corp Operating Profit Recalibration
JSR Corp, a key player in the Japanese chip materials arena (4185.T), has adjusted its operating profit expectations for the ongoing fiscal year. This recalibration is driven by challenges in semiconductor demand recovery and a notable slowdown in the biotech market.
As part of a broader industry restructuring, JSR finds itself in the acquisition process by a government-backed fund, projecting an operating profit of 16 billion yen ($107 million) for the fiscal year ending in March 2024. This reflects an 84% decline compared to the analogous period in the prior year.
Investor Uncertainties Amid Industry Restructuring
Investors grapple with uncertainties surrounding the chip sector’s recovery, primarily influenced by a shrinking demand for electronic devices such as smartphones and PCs. Noteworthy industry players like TSMC (2330. TW) and Samsung Electronics (005930. KS) maintain optimism about a potential upswing through increased investments in artificial intelligence.
Addressing the press, JSR CEO Eric Johnson acknowledged the initial optimism about a second-half industry resurgence. However, he disclosed that this anticipated recovery is no longer imminent, stating, “We firmly believe that we have reached the bottom.”
JSR’s Performance and Market Dynamics
In the second quarter, JSR reported an operating profit of 3.4 billion yen, showcasing a noteworthy rebound from the 6.1 billion yen loss in the preceding quarter. Recognized for its production of photoresists integral to chip manufacturing, JSR emphasized a robust 15% year-on-year growth in sales for cutting-edge extreme ultraviolet (EUV) lithography during the April-September period.
Despite these positive indicators, JSR’s shares currently trade below the offer price from Japan Investment Corp, overseen by the trade ministry, with a 7% decline recorded on Monday. CEO Johnson expressed unwavering confidence in the efficacy of the company’s strategic initiatives, stating, “We hold a strong belief in the effectiveness of our measures, considering this as an exceptional opportunity for all stakeholders.”
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