MegaChips reported a substantial decline in revenue and operating profit for the first quarter of the fiscal year ending March 2025. The company’s sales fell by 44.1% to 9.66 billion yen (US$68.6 million), while operating profit decreased by 44.9% to 874 million yen (US$6.2 million). Ordinary profit saw a steeper decline of 55.0% to 584 million yen (US$4.1 million). However, net profit rose dramatically by 129.6% to 2.187 billion yen (US$15.5 million).
The company attributed the sharp revenue and profit declines to reduced demand in its amusement business, following a high demand period in the previous year. MegaChips, a key supplier of system LSIs for Nintendo, has faced challenges due to the transition from the Nintendo Switch to new gaming hardware, which has significantly impacted its sales figures.
Despite these challenges, the company’s net profit surged due to a one-time gain of 4.035 billion yen (US$28.6 million) from selling shares in SiTime Corporation. This gain was partially offset by a 978 million yen (US$6.9 million) loss on the revaluation of investment securities.
Looking ahead, MegaChips forecasts a challenging fiscal year, with expected sales of 52 billion yen (US$369.4 million), a 10.3% decline from the previous year. The company anticipates operating profit to decrease by 27.1% to 4 billion yen (US$28.4 million) but expects ordinary profit to rise by 15.7% to 4 billion yen (US$28.4 million) and net profit to increase by 11.4% to 5 billion yen (US$35.5 million). MegaChips has achieved 18.6% of its sales target and 43.7% of its net profit goal in this quarter.
