SUMCO says it cannot meet 300mm wafer demand, yet guides to a ¥3.3 billion operating loss

SUMCO, one of the world's largest silicon wafer makers, put out nine-month results↗ on November 11 that point in opposite directions ¹². Sales for January to September rose ¥28.1 billion year on year to ¥332.5 billion ¹², and operating results swung from a ¥5.8 billion profit to a ¥4.3 billion loss ¹.

The July to September quarter alone made ¥2.0 billion of operating profit on ¥117.5 billion of sales, ahead of the company's own break-even forecast ¹. For the full year SUMCO guides to sales of ¥439.5 billion, up 7.3%, an operating loss of ¥3.3 billion and a net loss of ¥3.4 billion ¹.

The net figure beats the ¥13.3 billion loss 15 analysts expected ¹, helped by a ¥13.6 billion one-off gain from selling part of its Taiwanese unit Formosa Sumco Technology ¹. The shares closed up 3.9% at ¥2,170 ².

Shipments are up 13.4% and SUMCO still cannot fill demand

Demand is not in doubt. SEMI, the chip industry association, counted worldwide wafer shipments up 13.4% year on year in the third quarter↗ ³, and the committee that compiles the data is chaired by SUMCO sales chief Masatsugu Miura ³. SUMCO says AI-related demand has it "becoming unable to meet requested volumes" of 300mm wafers ¹.

¥131.4 billion of depreciation absorbs the boom

Almost none of that reaches profit. Earnings before interest, tax, depreciation and amortization were ¥35.0 billion in the quarter against ¥33.0 billion of depreciation, leaving ¥2.0 billion ¹. The October to December guidance repeats the shape: ¥32.1 billion of EBITDA, ¥31.1 billion of depreciation, ¥1.0 billion of operating profit on ¥107.0 billion of sales ¹. On that base, a 1% move in selling prices is worth about ¥1.07 billion, more than the whole quarter's guided profit ¹.

Prices are moving everywhere except SUMCO's contracts

Rival Shin-Etsu Chemical made ¥212.1 billion of operating profit in the same July to September quarter, about a hundred times SUMCO's, and has begun raising prices, but only on volumes beyond its long-term agreements, which run to the end of 2027 at the earliest ¹⁴. Taiwan's three biggest wafer makers confirmed increases of at least 10% in August↗, ending a three-year pricing freeze ⁵. Germany's Siltronic▼−1.56% — Siltronic, down 1.56 percent today lifted its full-year outlook on AI-driven demand, though price and mix had minimal impact on its beat ⁶⁷.

The stock is up 78% before any price rise

SUMCO's long-term contract prices were "protected" last quarter ¹, and it cut nine-month capital spending to ¥29.7 billion from ¥69.3 billion↗ because added capacity "does not make economic sense at current selling prices" ¹. The stock has risen 78% over the past year ⁸, and 16 analysts still rate it OUTPERFORM with an average target of ¥3,613.12, a 73% spread over the ¥2,089 close ².

The January to March forecast settles it

No price increase has been announced ¹. SUMCO guides one quarter at a time ¹, so the January to March forecast, due with the full-year results early next year, settles it: guidance above ¥1.0 billion without a price rise means mix, utilization and cost cuts are carrying the number. Formosa Sumco left the consolidated accounts on September 30, blurring the comparison ¹. A shortage SUMCO expects to tighten further stops at the contract line ¹.