SUMCO returns to quarterly operating profit on 300mm wafer demand

SUMCO reported Nov. 11, 2026, that third-quarter operating income swung to a profit of about 2.0 billion yen ($13 million), ending a streak of quarterly operating losses.

Consolidated revenue for the first nine months rose 9.2% year-on-year to 332.52 billion yen ($2.17 billion). Rising shipments of advanced 300mm wafers offset broader weakness across legacy semiconductor product lines.

The Tokyo-based company recorded an operating loss of 4.40 billion yen for the nine-month period. That deficit narrowed substantially from the prior quarter as high-margin substrate shipments accelerated.

Ordinary income for the July-September quarter reached 2.29 billion yen. The metric rebounded from an ordinary loss of 2.54 billion yen posted in the same quarter of 2025.

Nine-month net loss stood at 7.42 billion yen, weighed down by restructuring charges. Operating results nonetheless beat internal guidance as factory yields improved on leading-edge production lines.

SUMCO ranks as the world's second-largest supplier of silicon wafers, holding roughly 24% of the global merchant wafer market behind domestic peer Shin-Etsu Chemical.

Silicon wafers serve as the primary foundational building block for integrated circuits. They are sliced from hyper-pure monocrystalline silicon ingots and polished to atomic flatness.

Surging demand for artificial intelligence processors and high-bandwidth memory (HBM) propelled shipments of premium 300mm epitaxial wafers during the third quarter, the company said.

Epitaxial wafers feature a thin layer of pristine, defect-free silicon grown over the base substrate. Advanced logic foundries require this architecture to build complex transistor gates below 3 nanometers.

Leading AI accelerators consume significant wafer area across logic dies, base dies and stacked memory tiers. This architecture multiplies high-purity silicon consumption per computing node, SUMCO said.

Hyperscale data center investments kept tier-one fabrication lines fully engaged. Leading chipmakers accelerated procurement schedules to protect wafer allocation for advanced packaging lines and stacked memory modules.

By contrast, demand for smaller wafers and standard polished silicon remained depressed. Industrial chip customers and automotive device makers continued working through elevated component inventories, the company said.

The diverging dynamic widened the operational performance gap between specialized cutting-edge substrate facilities and commodity manufacturing sites across Asia.

To counter chronic oversupply in legacy markets, SUMCO decided to terminate small-diameter wafer production at subsidiary STC's Miyazaki plant. The shutdown incurs an extraordinary loss of 3.78 billion yen.

The Miyazaki facility will cease manufacturing smaller wafers on Dec. 31, 2026. The move eliminates redundant fixed operational costs in lagging product categories.

SUMCO also executed structural changes to its corporate perimeter during the quarter. The company sold a partial equity stake in Taiwan-based Formosa SUMCO Technology (FST).

The transaction took effect Sept. 30, 2026. Formosa SUMCO Technology shifted from a consolidated operating subsidiary into an equity-method affiliate, altering top-line comparisons for subsequent reporting periods.

The deconsolidation removes Formosa SUMCO Technology's revenue from headline totals while reducing exposure to Taiwan's commoditized silicon wafer market, the company said.

Adjusted fourth-quarter revenue excluding FST is projected to increase by 6 billion to 7 billion yen from the third quarter. Projected operating income is guided at 1.0 billion yen.

Heavy depreciation charges from past capacity expansions continue to burden cash flow. Elevated capital expenditure spent on cleanroom expansions reached peak amortisation during the current fiscal year.

Capital spending will decline as facilities reach commercial output. The shift is expected to free operational cash flow as fab operators absorb newly installed tool sets, the company said.

Contract negotiations for 2027 deliveries show wafer buyers accepting price tiering. Customers are agreeing to pay premiums for advanced epitaxial substrates while demanding concessions on standard inventory.

Customer inventory corrections for mature logic nodes are projected to stretch into next year. The overhang prevents an immediate recovery in standard polished wafer pricing, SUMCO said.

Global wafer shipments increased 13.4% year-on-year across the industry in the third quarter to 3,756 million square inches, according to SEMI industry data.

The industry group attributed volume growth to advanced logic expansion, silicon photonics packaging and auxiliary power semiconductor lines deployed inside AI data centers.

The company's earnings release does not state whether third-quarter revenue beat external consensus estimates, as filings only compared figures against internal management projections.

Wafer processing at the Miyazaki small-diameter line ends Dec. 31, 2026, marking the formal completion of the group's current legacy restructuring phase.