Japanese semiconductor maker MegaChips Corp. slashed its annual profit forecast as demand for gaming chips weakened and customers reduced inventory levels.
The Osaka-based company lowered its operating profit outlook for the fiscal year ending March 2025 to 2.3 billion yen ($15.5 million), down 42.5% from its previous forecast. Revenue is now expected to reach 45 billion yen, 13.4% below earlier projections.
MegaChips, which supplies components to Nintendo Co., cited lower-than-expected demand in its amusement business segment. The company also faced headwinds in its ASIC division due to inventory adjustments by customers and additional development costs.
To maintain its net income target of 5 billion yen, MegaChips plans to sell part of its stake in SiTime Corp., expecting to book a 3.5 billion yen gain. This move would help offset the impact of weaker operating performance and asset disposal losses.
The revised forecast represents a 58% drop in operating profit and 22.3% decline in revenue compared to the previous fiscal year, highlighting challenges in the gaming semiconductor market.
