Earnings call transcript: Kokusai Electric misses Q3 2025 earnings forecast

Kokusai Electric Corporation, a leading Japanese semiconductor equipment manufacturer, reported a disappointing set of financial results for the third quarter of fiscal year 2025 during an earnings call held on February 13, 2025, in Tokyo. The company failed to meet analysts' consensus earnings forecasts for the three-month period ending December 31, 2024, citing a significant slowdown in demand for memory-related chip-making tools and persistent supply chain challenges within the global electronics sector. This underperformance marks a notable shift for the firm, which had previously benefited from the aggressive expansion of the artificial intelligence and data center infrastructure markets. During the detailed briefing, executives highlighted that while the logic and foundry sectors remained relatively stable, the memory market—specifically NAND flash and DRAM—showed unexpected volatility that hampered the company's delivery schedules. Kokusai Electric, which specializes in thin-film deposition technology, noted that several major clients deferred equipment installations or pushed back procurement orders into the following fiscal year. The resulting revenue shortfall for the quarter underscores the cyclical nature of the semiconductor industry and the current sensitivity of equipment suppliers to fluctuations in capital expenditure from top-tier chipmakers. In response to the missed projections, the company's management outlined a revised strategic outlook, focusing on cost-optimization measures and an increased investment in next-generation batch processing technology. Despite the immediate quarterly setback, the firm expressed cautious optimism regarding a potential recovery in late 2025 as the demand for high-bandwidth memory (HBM) increases to support AI workloads. Investors and analysts now await the company’s full-year guidance adjustment, as the market looks for signs of stabilization in the broader semiconductor manufacturing equipment ecosystem.