Rohm (6963) 1Q results: 1Q operating profit beats consensus; look for profit to improve from 2Q as capacity utilization rises

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Rohm (6963)

1Q results: 1Q operating profit beats consensus; look

for profit to improve from 2Q as capacity utilization rises

Positive: 1Q FY2026 results beat the consensus view and guidance. Management

commented that it needs to assess the impact from the Kumamoto earthquake and

SiC sales for European EV applications following strong demand in 1Q, but that

it currently expects broadly flat sales in 2Q. However, inventory adjustments for

finished products ended in 1Q, and Rohm intends to raise capacity utilization in

line with demand from 2Q. Our impression is that management’s comments on 2Q

sales are cautious, and we expect strong QoQ profit growth as capacity utilization

rises further.

Results summary: 1Q sales were ¥135.7 billion with operating profit of ¥9.6

billion, in line with our forecast of ¥9.9 billion but above the Bloomberg

consensus estimate of ¥7.7 billion. 1Q operating profit beat guidance for ¥5.0

billion, but Rohm left full-year guidance unchanged. However, we expect a

large guidance beat.

Key points: (1) Rohm will continue to reduce levels of work-in-progress and

inputs, but completed inventory adjustment of finished products in 1Q. 1Q

capacity utilization was just over 60%, but we expect more than 70% for some

products in 2Q as management plans to raise capacity utilization in line with

demand. (2) SiC sales rose 53% YoY in 1Q, and we estimate that they reached

¥10–11 billion. Sales for new EV applications in Europe beat

guidance. Adoption for AI server applications also rose. (3) Sales for AI server

applications grew 67% YoY. Management commented that it now targets

FY2026 sales of ¥30 billion versus initial guidance of ¥25 billion. Sales for AI

server applications are beating initial guidance driven by Si power devices, and

Rohm plans to respond by increasing production via measures such as

reassigning production lines that are currently making unprofitable products

and expanding production capacity. (4) Management commented that it is

already negotiating price hikes in response to the gold price spike, but has

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