Kyocera, a leading Japanese electronic components manufacturer, plans to divest 10% of its consolidated revenue, valued at approximately JPY200 billion (US$1.27 billion), by the end of fiscal year 2025 (April 2025–March 2026). The strategic move comes as the company faces declining profitability in key sectors, including automotive electronics and semiconductor-related operations.
Nikkei Asia reports that Kyocera's President, Hideo Tanimoto, revealed plans to sell off non-core businesses with weak profit prospects during fiscal year 2025. While the specific assets targeted for sale remain undisclosed, the company will execute the divestiture process in phases and may include factory assets in the negotiations.
Originally a ceramic components specialist, Kyocera has since diversified into 15 distinct business segments, including electronic components, communication devices, medical equipment, cutting tools, power tools, multifunctional copiers, and printers.
Operating profit shows consistent decline
Kyocera's consolidated operating profit has steadily declined over the past three years, dropping by 14% year over year in fiscal year 2022 and 28% in fiscal year 2023. For fiscal year 2024, the company projects a further 27% decrease, bringing operating profit down to JPY68 billion (US$431 million).
This projected figure marks a significant decrease from Kyocera's peak operating profit of JPY148.9 billion (US$944 million) in fiscal year 2021, reflecting a sharp 54% decline over three years, according to Kyocera.
New semiconductor fab signals strategic shift
Kyocera is set to invest JPY68 billion (US$431 million) in a new factory in Isahaya City, Nagasaki Prefecture—its first domestic facility in two decades. Expected to commence operations by fiscal year 2026, the factory will specialize in ceramic components for semiconductor manufacturing equipment and advanced packaging materials tailored to AI and 5G applications. The site was chosen for its logistical advantages and access to a highly skilled workforce in semiconductor-related fields.
This initiative is part of Kyocera's broader JPY900 billion (US$5.71 billion) three-year investment strategy aimed at strengthening its semiconductor business. The company targets doubling its core components division's revenue to JPY1 trillion (US$6.34 billion) by fiscal year 2028 compared to fiscal year 2021, capitalizing on rising global demand for advanced semiconductor materials, according to Nikkei Asia.
Tanimoto noted that recent investment projects are becoming increasingly large-scale, necessitating a concentration of resources on profitable ventures. He emphasized that the need to release unprofitable businesses is a critical reason behind Kyocera's declining profitability.