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Ibiden Lowers Financial Forecast Amid Slow IC Substrate Order Recovery

Japanese Manufacturer Projects 45% Drop in Net Profit, Citing Delayed Demand Recovery in Electronics Sector
i 4062.TSE Mid and Small Cap 2000
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Ibiden Co., Ltd., a leading Japanese manufacturer of integrated circuit (IC) substrates, has revised its financial outlook downward for the current year, marking the second adjustment in its projections. The company now anticipates a significant 45% decrease in net profit, attributing this downturn to a slower-than-expected rebound in orders for its electronics division, which encompasses printed circuit boards (PCBs) and IC substrates. This revised forecast falls below market expectations, signaling a cautious stance towards the near-term recovery of the IC substrate market.

Despite its status as one of the top three IC carrier board manufacturers globally, and holding the largest share of carrier boards among major American AI companies, Ibiden’s performance has been impacted by stagnant demand in the server and PC segments. This has led to reduced revenue and lower utilization rates, even amidst the booming AI sector.

Ibiden President Takeshi Aoki, during a financial report briefing on February 1, noted that while demand for AI servers remains robust, a significant recovery in general server demand is not anticipated until the latter half of the year, with a more substantial performance rebound expected next year. Aoki emphasized that the focus for the current year would be on enhancing competitiveness through improved production line yields.

Comparatively, Taiwanese IC substrate manufacturers, who lead the global market in output value, also exhibit a cautious outlook for the first half of the year, expecting a modest recovery trend in the second quarter and a more pronounced rebound in the latter half. However, growth prospects hinge on the market adoption of AI and other emerging technologies.

Specifically, Xinxing, a leading carrier board manufacturer, adopts a conservative stance for the first quarter, with expectations for a slight improvement in the second quarter. The company’s competitive edge in AI-related products, coupled with long-standing customer relationships, positions it well for the anticipated AI market expansion.

Meanwhile, Jingshuo anticipates a supportive demand for its ABF carrier boards in the first quarter, albeit with a forecasted 5% sequential decline. The demand for BT carrier boards, closely linked to mobile phone production cycles, faces a traditional seasonal downturn, further exacerbated by a reduction in working days, leading to an estimated 10-15% quarter-on-quarter revenue decline.

This cautious outlook across the IC substrate industry reflects broader market uncertainties and the pivotal role of technological advancements such as AI in shaping future demand.

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