TOPPAN (7911) Investor Update summary

Electronics Business Overview and Financial Performance

• Fiscal 2024 net sales reached JPY 283.3 billion with a non-GAAP operating profit of JPY 53.4 billion and an 18.9% margin; semiconductor packaging sales were JPY 194.8 billion with a 27% margin, and displays contributed JPY 88.5 billion at a 2% margin.

• Electronics accounted for 16% of consolidated net sales.

• FY2025 sales are forecast at JPY 259 billion, with a significant profit increase expected in Q4 as new production lines ramp up.

• By FY2030, sales are targeted at JPY 350 billion, with semiconductor-related sales comprising approximately 80% and a non-GAAP operating margin of 30%.

Strategic Focus, Market Positioning, and Trends

• Focus on high-end FC-BGA substrates for AI, server CPUs, and network switches, leveraging technical superiority in microfabrication and build-up wiring.

• Holds the number three global position in high-end switch substrates due to technical capabilities and stable supply.

• Business strategy targets AI accelerators, high-end switches, and ARM-based server CPUs for growth.

• AI-driven demand is expected to drive a sevenfold increase in the AI semiconductor market by 2030, accounting for 70% of global semiconductor demand.

• Data traffic projected to increase 100-fold by 2040, transforming data center architecture and boosting demand for advanced network switches.

Technology Roadmap and Innovation Initiatives

• Roadmap includes mass production of advanced packaging (chiplet, glass core, organic RDL interposers) and support for photonics-electronics convergence, with new lines in Niigata and Ishikawa and a new Singapore plant operational by end-2026.

• R&D focuses on submicron organic RDL interposers using the damascene process, glass-core FC-BGA, and high-speed optical/electrical transmission for next-generation data centers.

• By 2030, data centers will require 800 Tbps transmission speeds, demanding miniaturization and photonics-electronics convergence.

• Collaboration with universities, research institutes, and global partners is accelerating technology development and market responsiveness.

• Next-generation interposers must offer large size, high flatness, and low power consumption; glass and organic RDL interposers are under development.