Oxide (6521) manufactures and sells optical single crystals, optical components, laser light sources, optical measuring devices, etc. The segment is divided into three segments: the semiconductor business (48% in sales structure by division as of the 2024/2 fiscal year), which manufactures single crystals and lasers for semiconductor Si wafer defect inspection devices; the healthcare business (same 24%), which manufactures single crystals for PET testing devices for cancer diagnosis; and a new domain business (same 28%) that develops into various fields such as quantum power semiconductors, space, and defense. The company's core technologies are “high quality single crystal growth technology” and “wavelength conversion technology,” and it develops, manufactures, and sells products compatible with a wide range of wavelengths by combining the two core technologies.

In the semiconductor business, we develop and manufacture single crystals and lasers used in wafer surface defect inspection devices in semiconductor manufacturing processes (pre-process). The company's wavelength conversion single crystals for deep ultraviolet lasers have a global market share of 95%, and deep ultraviolet lasers have a global market share of over 30%, and are used in cutting-edge semiconductor wafer inspection equipment. It is in operation at the world's leading semiconductor manufacturers (Intel, TSMC, Samsung). It joined SEMI, which is a global organization for the semiconductor market, in 2023/12, and was the only laser for wafer inspection equipment published in SEMI's “SEMI FREAKS Semiconductor Industry Map 2024 Edition”.

In the healthcare business, we manufacture scintillator single crystals for PET testing devices for cancer diagnosis. A scintillator single crystal is a crystal that reacts to radiation and emits light, and is an essential material for PET inspection devices. The global market share of the company's products used in PET devices is around 20%, and the company's scintillator single crystals have three competitive advantages: high quality single crystals using unique crystal growth technology, high yield due to years of production technology improvements, and entry barriers due to a wide range of patents.

In the new domain business, we are working on social implementation of over 10 research and development themes, such as SiC single crystals and quantum entangled light sources. We have selected research and development themes that have our strengths and technical advantages and can gain a high market share. Recently, Israel's Raicol became a subsidiary. Raicol specializes in single crystal growth technology called the flux method, and is demonstrating competitiveness in business fields such as space, defense, beauty, quantum, and energy.

Sales for the first half of the fiscal year ending 2025/2 were 3398 million yen, up 2.3% from the same period last year, and operating profit and loss landed in deficit of 396 million yen (112 million yen deficit in the same period last year). Both the semiconductor business and the healthcare business are generally making steady progress against full-year forecasts. In the healthcare business, in addition to acquiring new customers for cancer diagnostic PET devices, it seems that there are ongoing inquiries for brain PET devices where future demand is expected. However, in response to the prolonged conflict in Israel, the new area business seems to have increased uncertainty about the current situation and earnings outlook, and plans have not been achieved. Full-year sales are expected to increase 29.5% from the previous fiscal year to 8553 million yen, and operating profit and loss surplus of 202 million yen (deficit of 983 million yen in the previous fiscal year).

The company anticipates sales of approximately 11,000 million yen, an operating profit margin of 11%, and an EBITDA margin of 22% for the 2027/2 fiscal year. It seems that they will focus on contributing to sales and operating profit through a V-shaped recovery in the semiconductor business, accelerating research and development in the quantum field, etc., and accelerating mass production development of SiC. The semiconductor manufacturing equipment market, which is the main customer of deep ultraviolet lasers, is on a recovery trend from 2024, and a high growth rate of 17.9% is expected in 2025 compared to the previous year. The PET inspection equipment market is expected to grow steadily by more than 5% each year, and the next-generation power semiconductor market represented by SiC, GaN, and gallium oxide (Ga2O3), which are new domain businesses, is growing rapidly. If growth in new business areas is in full swing in addition to the expansion of the market environment, there is a possibility that we will reach a turning point in business performance, and I would like to keep an eye on the company's future trends.