Sumco (3436.T): Q2 results – Somewhat negative, but conditions probably similar to those of competitors

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06 Aug 2026 08:24:09 ET │ 10 pages

Sumco (3436.T)

Q2 results – Somewhat negative, but conditions probably similar to

those of competitors

CITI'S TAKE

Buy

Price (06 Aug 26 15:30)

¥3,544.0

Target price

¥3,900.0

Expected share price return

10.0%

Expected dividend yield

0.6%

Expected total return

10.6%

Market Cap

¥1,239,384M

US$7,857M

Both Q2 results and guidance tallied with expectations, but confirmation

that LTA negotiations have yet to begin is likely to prove somewhat

negative for the shares. The Q2 -¥1bn operating loss tallied with our ¥1bn-¥2bn loss forecast, and Q3 OP guidance of ¥0bn is also as expected

(-¥1bn to +¥1bn). Like competitors, 300mm lines are operating nearly at

full capacity. 1) Explaining that LTA negotiations have yet to begin,

management explained it is debating whether to begin the process before

or after current LTAs expire. 2) Existing LTAs are set to expire sequentially,

with some running until c2028, 3) It is receiving capacity expansion

requests from customers. 4) It reconfirmed the need for sizable price hikes

before it expands capacity. 5) The firm has no current plans to resume

construction of the new Yoshinogari plant, which was suspended in

March. 6) It is currently conducting upgrade investments on existing

facilities.

Yuta NishiyamaAC

Implications — Many investors are likely to be taken aback by Sumco's revelation

that it has yet to commence LTA negotiations while competitors are meanwhile

advancing and partially concluding their negotiations. However, since Sumco is

receiving capacity expansion requests from customers, we understand that

conditions (at this point) are similar to those of its competitors. We think Sumco

may be timing negotiations for when supply-demand becomes tighter, which would

help it negotiate prices that would enable reinvestment.

Consol.

Sales

OP

RP

NP

EPS

PE

¥M

YOY (%)

¥M

YOY (%)

OPM(%)

¥M

YOY (%)

¥M

YOY (%)

X

12/24A

396,619

-6.9

36,925

-49.5

9.3

37,457

-48.4

19,878

-68.9

57

62.3

12/25A

409,670

3.3

1,342

-96.4

0.3

-3,887

nm

-11,750

nm

-34

na

12/26E

441,000

7.6

-9,800

na

nm

-18,200

na

-16,460

nm

-47

na

12/27E

494,000

12.0

32,300

nm

6.5

32,300

nm

23,094

nm

66

53.7

12/28E

530,000

7.3

78,500

143.0

…