Rohm Semiconductor posted a consolidated net loss of JPY50 billion (US$337 million) for fiscal year 2024 (ending March 2025), its first annual loss in 12 years and the second-largest in its history, according to Yomiuri and Nikkei Asia. The deficit far exceeded Rohm's earlier projection of a JPY6 billion loss, driven by slumping sales of power semiconductors for electric vehicles (EVs). Revenue fell 4.1% year over year to JPY448.4 billion, with an operating loss of JPY40 billion, a stark reversal from the JPY43.3 billion operating profit in fiscal 2023.
Market headwinds and strategic missteps
The loss, only surpassed by a JPY52.4 billion deficit in 2012 due to a digital appliance market downturn, was fueled by multiple factors. Weak EV demand, production cuts by Japanese automakers amid "certification test" fraud scandals, and a sluggish Chinese economy curbed sales of power semiconductors and industrial products. Rohm also exited the silicon wafer business, incurring JPY30.3 billion in impairment losses on production equipment at its global factories.
At a May 13, 2025, press conference, the company admitted it misjudged market shifts, failing to adjust production and forecasts in time. Significant inventory write-downs, coupled with high R&D and personnel costs, further eroded profitability. A voluntary retirement program for about 200 employees added JPY2.1 billion in special losses.
Cautious recovery outlook
For fiscal 2025, Rohm forecasts a 1.9% revenue decline but projects a modest recovery with an operating profit of JPY4 billion and a net profit of JPY7 billion. The company called fiscal 2024 "the worst possible outcome" and outlined plans to boost profitability by cutting capital expenditure by 36% to JPY85 billion and raising product prices. Investments, including a new power semiconductor plant in Miyazaki Prefecture, will be scaled back, and production facilities will be restructured over the next two to three years.
Strategic partnerships
Rohm is also in talks with Toshiba Group, which began in July 2024, to collaborate on power semiconductor manufacturing and development. While progress has been made, Rohm noted that final agreements are still pending. The company expects minimal financial impact from US tariff policies.
Despite the challenges, Rohm remains optimistic about recovery, focusing on cost management and strategic partnerships to navigate ongoing weakness in EV and industrial machinery demand.
Article edited by Jerry Chen
