MegaChips reported an 87% plunge in net income for the fiscal first half ending September, as declining semiconductor orders overshadowed growth in its Nintendo-linked amusement business.
The Osaka-based chip designer posted net income of ¥398 million ($2.6 million) for the six months through September, down from ¥3.06 billion a year earlier. Revenue fell 14.2% to ¥21.33 billion ($139.4 million), while operating profit dropped 42.2% to ¥1.03 billion.
The company cited persistent inventory adjustments across its ASIC business, which designs custom chips for specific applications. Although demand from Nintendo-related entertainment products remained robust compared to last year, that growth couldn’t offset broader weakness in semiconductor orders.
Currency fluctuations added to the pressure, with foreign exchange losses of ¥216 million dragging down ordinary profit by 63.4% to ¥710 million. Tax expenses of ¥333 million further eroded bottom-line results.
Nintendo has been ramping up production of the Switch 2 console, with the company tapping Samsung Electronics to manufacture chips for the device launching in June. The gaming giant initially targeted 15 million units through March 2026 but recently increased production plans to 20 million units.
For the full fiscal year ending March, MegaChips maintained its forecast of ¥90 billion in net income and ¥42 billion in revenue. The company’s first-half results represent just 4.4% of its annual profit target, raising questions about the steep second-half recovery needed to meet guidance.
