■Company Overview

Hagiwara Electric Holdings ＜7467＞ was founded in 1948 by the founder, Mr. Hagiwara Tadaomi (Hagiwara Tadaomi), working for Anritsu ＜6754＞ as a repair business for electrical products such as radios. Initially, it sold electronic components as a sales agency for NEC ＜6701＞ (NEC), and expanded into the automobile field in the latter half of the 1960s, took this opportunity to expand its business, and now the Toyota Group such as Denso is its main business partner. It was listed on the over-the-counter market in 1995 (then the Tokyo Stock Exchange (hereafter, the Tokyo Stock Exchange) JASDAQ market), and in 2014/11, the market changed to the Tokyo Stock Exchange section 1 and the Nagoya Stock Exchange (hereafter, name certificate) market section 1. Furthermore, it transitioned to the prime market due to the Tokyo Stock Exchange market division reorganization in 2022/4, and transitioned to the premier market due to the business card market division restructuring.

■Business Overview

It is a semiconductor trading company mainly for automobiles, but the solution business has been expanding in recent years

1. Business Description and Segment Overview

The company's main business is as a semiconductor trading company that purchases and sells SoCs, microcomputers (microcomputers), various semiconductors, etc. from semiconductor manufacturers, and in addition to that, it also purchases, sells, and integrates IT equipment, and develops, manufactures, and sells industrial electronic devices. Approximately 89% of sales (fiscal year ended 2024/3) is for automobile-related companies, and in addition to simply selling parts and components, they also participate from the product planning/design stage, provide microcomputers and peripheral devices with specifications in line with customer companies' requests, and carry out system development, etc. The spread of hybrid vehicles and EVs, and the rise in electrification associated with the progress of ADAS supports the company's growth, but in the future, we see that further automation of automobiles (autonomous driving, automatic braking, etc.), the spread of BEVs and SDVs, and the wave of IT at manufacturing sites will also be a tailwind for the company.

The company transitioned to a holding company system from 2018/4, and along with this, the names of the segments were also changed to “device business” and “solution business.” Also, the “Development and Production Division” is involved as an important internal organization. The summary is as follows.

(1) Device business (sales ratio 87.1% for the fiscal year ending 2024/3)

We mainly sell semiconductors and electronic components such as SoCs, microcomputers, custom LSI, analog power semiconductors, capacitors, relays, connectors, and color LCD panels to automobile-related companies. In addition, technical support such as custom LSI design and embedded software/hardware development support will also be developed.

Specifically, when planning a next-generation model, requests from customer manufacturers in terms of functionality are heard, and peripheral devices including optimal microcomputers to realize them are proposed. Also, when developing a device, we provide a one-stop solution for microcomputer performance and technical support for various development tools, confirming and evaluating the operation of the device, and supplying the device in a timely manner during mass production.

(2) Solution business (12.9% same period)

With sales of IT equipment, embedded equipment, and measurement/FA equipment as the core, and construction of IT platform infrastructure/IoT systems, we are also involved in the development and manufacture of industrial computers, which are our products, and the design/manufacture of various FA/special measurement systems, and we are engaged in a proposal-type business that provides various solutions combining these. In recent years, we have been focusing on network reconstruction services from cybersecurity measures, data utilization, automation of business operations, infrastructure development and system development for edge, IoT systems, production management systems, etc.

Furthermore, M&A is being actively promoted to expand business areas, and Hagiwara Engineering, which has processing, assembly, and transportation technology for production lines, was added to the group in 2022, and Belladati, which has an original IoT data platform, was added to the group in 2024.

(3) Development and Production Division

It is a business division of the Solution Business and works on the development and manufacture of electronic and information products.

In the same division, timescales corresponding to each industrial field are the most important issues, and reliable electronic devices and embedded solutions that pursue efficiency and the environment are proposed. The company's experience in developing industrial equipment and measurement and control devices, which it has been involved in for many years, is fused with new technology and applied to a wide range of fields.

2. Characteristics and strengths

The company's main business is a “trading company business” that purchases semiconductors from Renesas Electronics ＜6723＞ and mainly sells them to the Toyota Group, but in the case of the company, it not only simply flows products from right to left, but it also has the following characteristics and strengths.

(1) Proposal and development capabilities

Since the company has an in-house development and technical support department (engineer), it has excellent proposal and development capabilities. In particular, it has a close relationship with the Toyota Group, and provides optimal devices by accurately grasping the needs of the same group and feeding back the details to semiconductor manufacturers.

Furthermore, in addition to gathering unique knowledge and technology and proposing products and modules that are optimal for user needs, development support is also provided in response to customer requests. The company can be said to be a trading company that “can make proposals” to customers, and can also “develop” products required by customers.

(2) Thick pipes with the Toyota Group

The relationship with the Toyota Group is not simply a benefit in terms of production (increase in production of the Toyota Group → increase in sales of the company), but the company's technical capabilities, proposal capabilities, and development capabilities are further refined due to business with the Toyota Group, which has high technology in next-generation automobiles such as hybrid cars and EVs.

Currently, we are working on applying this technology, proposal power, and development power not only to automobile-related companies but also to various industrial equipment, FA equipment, production systems, inspection systems, etc., and future business expansion can be expected. The very relationship with the Toyota Group, which is said to be the most demanding in the world, can be said to be the company's asset.

(3) Technical capabilities for non-automobile-related companies

Approximately 11% of the company's sales (fiscal year ending 2024/3) is for non-automobile-related companies, but most of this is system construction as an IT company. It is particularly strong in system construction at production sites. The sales volume (2,9023 million yen for the fiscal year ending 2024/3) and operating profit (2040 million yen) of the solution business are comparable to the sales and profit scale of general listed system integrator (SI) companies, and having such SI functions is also a characteristic of the company, and it is also an advantage of the company.

(Written by FISCO Visiting Analyst Noboru Terashima)