Japanese electronic component maker Kyocera has proposed a plan to nearly double the company's equipment investment for the next fiscal year, with an emphasis on chipmaking equipment and EV components. The company's goal is to double its revenue and triple its operating profits within 6 years.
Kyocera's annual revenue is set to surpass JPY2 trillion (US$15.7 billion) for the first time in FY22, with an operating profit margin (OPM) of 10%. The company's next operational goal is to reach an annual revenue of JPY3 trillion (US$23 billion) and an OPM of 20% before FY28. To achieve this goal, Kyocera president Hideo Tanimoto has proposed a plan to double equipment investment to satisfy the market demand.
According to Kyocera's financial report and business information, the company's equipment investment for FY22 reached JPY200 billion. From FY20 to FY22, the total investment is JPY468.9 billion.
Despite that, the additional production capacity from this investment is still not enough to satisfy the market's demand. Tanimoto stated that orders for a specific component used in the most advanced chipmaking equipment need another 2 to 3 years before they can be complete.
Reports from Dempa pointed out that the 2030 global semiconductor market will be twice its current size due to the growing demand for wireless communication like 5G/6G, EVs, and the latest semiconductor equipment. Kyocera's current production capacity is insufficient. To avoid order outflows, the equipment investment amount for FY23 will be 1.5 times that of FY22, reaching JPY300 billion. From FY23 to FY25, the accumulated amount will be JPY800 to 900 billion.
Of Kyocera's nearly JPY900 billion equipment investment over the next three years, more than half will be for precision ceramics and packaging equipment used in advanced chipmaking equipment. The other 40% or so will be for precision parts like MLCC (multi-layer ceramic capacitor) and high-voltage, high-temperature EV component production, like automotive GaN lasers or high-efficiency LED headlight parts.
As with the actual content of the investment, part of it is already confirmed to be the new factory at the Kokubu site in Kagoshima, Japan. It began partial operation in December 2022 and will be fully operational by the summer of 2023. 20 hectares of new land next to the current factory have already been purchased and will be used for a new factory.
In addition, the company has purchased 15 hectares of land in Nagasaki and plans to build a 1000-men factory before 2026. There are also plans to build new factories and purchase new land at the Sendai and Vietnam site.
There are also plans to demolish and update existing factories to introduce more advanced and automated processes. The renewable energy and energy storage system will be enhanced to create a reduced, even zero-carbon emission production line.
Article translated by Jack Wu
