DISCO H1 Operating Profit Jumps 48% to ¥116.6 Billion on AI Chip Demand, Beating Guidance; Interim Dividend Raised to ¥186

Shipments run ahead of plan

DISCO Corporation (TSE: 6146), the maker of dicing saws, grinders and laser saws used to cut and thin semiconductor wafers, reported consolidated results for the first half of FY3/2027, from April 1 to September 30, 2026, on October 22, 2026 under Japanese GAAP. Net sales rose 32.1% to ¥257,058 million, operating profit 47.9% to ¥116,639 million and ordinary profit 44.0% to ¥114,437 million. Net profit attributable to owners of the parent increased 43.7% to ¥80,366 million, or ¥740.84 per share against ¥515.70.

Continued data-center investment on the back of generative AI kept demand for high-performance chips such as advanced logic and HBM (high-bandwidth memory) at high levels. Shipments of precision processing equipment were strong, led by high-value-added machines for those chips, and shipments of consumable precision tools stayed high in line with customers' utilization rates. Total shipments rose 37.2% to ¥284,584 million. Results beat the first-half guidance DISCO issued in July, which called for net sales of ¥242,800 million and operating profit of ¥104,900 million.

Margins widen

Gross profit rose 37.2% to ¥183,917 million as favorable exchange rates and a richer mix of high-value-added products lifted the gross margin, more than absorbing a 22.0% rise in selling, general and administrative expenses to ¥67,277 million on higher personnel and R&D costs. The operating margin widened to 45.4% from 40.5%. The company booked a ¥636 million impairment on a building at its German subsidiary DISCO HI-TEC EUROPE in Bavaria, which is to be demolished to make way for a new one.

Balance sheet and cash flow

Total assets rose by ¥81,173 million from March 31 to ¥824,584 million, mainly on higher cash and deposits, while contract liabilities grew on the liabilities side. Net assets increased to ¥629,013 million and the equity ratio was 76.1%, down 2.8 points. Operating activities generated ¥111,708 million, investing activities used ¥54,814 million and financing activities, mostly dividend payments, used ¥40,617 million, leaving cash and equivalents of ¥200,627 million.

Nine-month guidance and dividend

DISCO discloses forecasts only for the period immediately ahead. For April to December it now expects net sales of ¥389,500 million (+28.2%), operating profit of ¥174,700 million (+38.4%), ordinary profit of ¥173,400 million (+37.1%) and net profit of ¥121,900 million (+31.6%), or ¥1,123.43 per share, with nine-month shipments of ¥434.2 billion at an assumed ¥151 to the U.S. dollar for October to December. It raised the interim dividend to ¥186.00 from the ¥171.00 it had forecast in July, against ¥129.00 a year earlier; the year-end dividend has not been decided.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.