Japan-based Rohm Semiconductor saw its operating profits decline by 21.5% in April–June 2023. Its automotive sales increased by 14.9% year-over-year, the only segment that enjoyed growth. President and CEO Isao Matsumoto had said Rohm will continue investing in SiC technology while it contains risks.
According to Nikkei, Dempa and Rohm, the company reported that its net sales decreased by 4% year-over-year to JPY120.1 billion (US$870 million) in the first quarter of the fiscal year ending March 31, 2024.
Rohm saw a much more significant decline in operating profits than in sales. Its operating profits decreased by JPY4.9 billion from 2022 due to higher equipment depreciation resulting from increasing investment in the SiC power semiconductor. The slow-moving demand from personal computers and servers did not help the profits, either.
The company enjoyed a 14.9% sales growth in automotive semiconductors from a year ago while seeing a decline in chips for industrial equipment, communication and other segments. Sales in the PC and storage segments dropped by 32.4% year-over-year, followed by the communication market, which decreased by 24.2%.
As for operating profits, Rohm's automotive segment grew JPY7.2 billion from last year, also the only one that saw an increase. One of the primary reasons for the decrease in operating profits was the company's active investment in SiC device equipment. The act caused growing depreciation and cut JPY4.1 billion in profits.
Rohm plans to inject JPY510 billion into SiC by the end of March 2028. Matsumoto said in July 2023 that the company will invest JPY40 billion to JPY50 billion in the technology annually on average in the next seven years. While the investment encompasses some risks, it is necessary for the company's growth.
He also said a battery EV requires 2.5 times of semiconductors an internal combustion engine vehicle needs. The trend of transitioning from silicon to SiC automotive power semiconductors will increase an EV's driving range.
The adoption of SiC started in China and has arrived in Europe, the US and Japan, Matsumoto said. It also expands from premium to affordable vehicle models. He said the demand for SiC has great potential, making the technology a reasonable investment target.
As for the next quarter, whether the semiconductor demand from smartphones and PCs will rebound is unknown. Rohm expected its automotive-grade power and LSI semiconductors will keep growing. SiC device sales will also increase in China and Europe. Therefore, the company has kept the full-year guidance it released three months ago.
Rohm will contribute JPY300 billion to the Toshiba buyout plan initiated by the Japanese Industrial Partners (JIP) to facilitate the collaboration for power semiconductors between Rohm and Toshiba. Rohm said it will apply for loans to fulfill the commitment.
