KYOTO, Japan -- Kyocera will invest 400 billion yen ($2.9 billion) in semiconductor-related production facilities through March 2026, betting big on cutting-edge chips for artificial intelligence and other fields under plans announced Tuesday.
The investments, unveiled by President Hideo Tanimoto as part of its medium-term business plan, represent a 130% increase over the previous three-year period. Kyocera will raise production capacity for package products, as well as fine-ceramic components for semiconductor-processing equipment.
Overall capital spending for the three-year period will reach a maximum of 850 billion yen, with 400 billion yen earmarked for the semiconductor-focused core components business.
"We will capitalize on the demand for advanced semiconductor components such as those related to ChatGPT," Tanimoto said, referring to U.S. company OpenAI's chatbot.
Kyocera will begin construction on a new plant, its first in Japan in around two decades, in Nagasaki prefecture by March 2024. Two main plants in Kagoshima prefecture, also in the country's south, will be expanded. The production value of fine-ceramic components for the year ending March 2026 is expected to be 1.8 times that of the year ended March 2023.
The three-year capital spending plan will be Kyocera's largest ever, both overall and in semiconductor-related investments.
"We need to make unprecedented investments to seize opportunities," the president said. He said that the company also plans to increase production of automobile capacitors, for which demand is increasing as self-driving technology evolves.
Kyocera will end smartphone sales to consumers by March 2025. Tanimoto explained that the smartphone market has matured, making it difficult to innovate.
Tanimoto also said the company will review other unprofitable businesses, including solar panels.
The medium-term plan calls for revenue of 2.5 trillion yen in the year ending March 2026, up 23% from fiscal 2022, as well as a pretax profit of 350 billion yen, up 99%. It targets return on equity of at least 7%, up from 4.3% in the year ended March 2023.