First Read: TDK "Key takeaways from the small meetings with management and..."

Research evidence excerpt

First Read: TDK "Key takeaways from the small meetings with management and..."

/27E 119.2 117.2

GPUs and ASICs, the company aims to enter the market by strengthening material 03/28E 137.9 133.6

development through a joint venture with Nippon Chemical Industrial. It appears to be 03/29E 164.8 149.8

targeting full-scale entry in the latter half of the next medium-term management plan

(FY3/28-FY3/30), or from FY3/31. In inductors, it plans to launch thin-film inductors for Shingo Hirata, CFA

vertical power delivery from the end of FY3/27. Analyst

shingo.hirata@ubs.com

+81-3-5208 6224

Other AI-related fields

The volume outlook in HDD heads/suspensions, the mainstays in AI-related products,

remains strong and in line with comments made alongside the announcement of FY3/26

results, with the company expecting FY3/27 yoy increases of 40% and 20%,

respectively. TDK still appears to have sufficient capacity in conventional heads to meet

near-term demand from US HDD makers. Management also explained its policy of

actively investing in HAMR. BBU operations will likely launch from H2 FY3/27. Although

still small in scale, the company appears likely to benefit from the mass production of LFP

batteries using the recently acquired production site of Malaysia-based Linergy Power. In

the "Other" segment, semiconductor manufacturing equipment (sales of ¥20-30bn) is

seeing strong demand for wafer transfer equipment, and management appears to have

medium-term expectations for high-precision bonders for 2.5D/3D packaging.

Valuation: Under Review

With our price target achieved, we are putting our rating and price target Under Review.

Highlights (¥b) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E

Revenues 2,103.9 2,204.8 2,504.8 2,565.6 2,735.2 2,925.7 3,117.8 3,307.6