Trex Semiconductor <6616> is engaged in the development, design, manufacturing, and sales of Semiconductor Devices.

The group consists of two companies, Trex Semiconductor and Phenitec Semiconductor. Trex Semiconductor is a semiconductor manufacturer but operates in a fabless manner without owning a factory. The products are mainly specialized in the analog power IC field and have strengths in world-class energy saving and miniaturization. Power ICs play an important role in controlling voltage and ensuring stable supply to power various functions of electronic equipment, and TOREX's power ICs contribute to the miniaturization and energy saving of electronic devices through unique technology. Application-specific revenue composition is 38.2% for industrial equipment, 14.5% for automotive equipment, 2.3% for Medical Devices, 3.2% for wearable devices, and 41.8% for QITABANKUAI. Regional revenue shows 32.5% for Japan, 39.1% for Asia, 19.1% for the European Index, and 9.3% for North America. (As of the first half of the fiscal year ending March 2025)

On the other hand, Phenitec Semiconductor specializes in semiconductor contract manufacturing (foundry) and mainly produces single-function semiconductor products referred to as "discrete". Recently, they have also been manufacturing power semiconductor products and are a Japanese manufacturer with over 50 years of establishment. They have factories in Okayama and Kagoshima, possessing a wealth of experience in high-level manufacturing capabilities and original device development. Orders from Trex to Phenitec account for about 65%, but only about 15% of Phenitec's production involves Trex products. The remaining 85% deals with products other than Trex. The fabless operation of Trex and the foundry business of Phenitec operate complementarily to generate synergy. The application-specific revenue composition is 28.0% for industrial equipment, 25.8% for automotive equipment, 1.3% for Medical Devices, and 44.9% for other equipment. Regional revenue is 38.1% for Japan, 20.6% for Asia, 8.1% for the European Index, and 33.2% for North America. (As of the first half of the fiscal year ending March 2025)

For the second quarter cumulative of the fiscal year ending March 2025, revenue fell 5.5% year-on-year to 12,524 million yen (Trex 4,817 million yen, Phenitec 7,707 million yen), with operating profit landing at 336 million yen, a 3.7 times increase. Trex saw a recovery trend in the Chinese market, but revenue declined due to downturns in the Japanese and European markets, particularly in the industrial and general consumer equipment sectors. However, profit was achieved due to exchange rate effects and the return of inventory valuation losses. Phenitec experienced a decrease in both revenue and profit due to market declines in Europe and North America. The speed of market recovery fell short of expectations, leading to a downward revision of full-year performance forecasts, with expected full-year revenue at 25,000 million yen, a 2.9% decrease from the previous period, and operating profit anticipated to be a profit of 400 million yen.

As key future markets, Trex points to industrial equipment (5G, IoT modules, Solid State Battery modules) and automotive equipment (Self-Driving Cars, ADAS, etc.), while Phenitec focuses on industrial equipment (industrial robots, Railroads, inverters, etc.) and automotive equipment (power semiconductors for EVs). Trex is reinforcing its power semiconductor product offerings alongside power ICs. A dedicated organization has been established to expand the power semiconductor business, strongly promoting the enhancement of the product lineup. On the other hand, Phenitec plans to develop its business centered around the semiconductor front-end wafer process foundry business as its strength. One of its main fabs, the Kagoshima factory, is increasing production capacity to establish a stable production system of 0.02 million sheets per month for the fiscal year ending March 2025. The production capacity for Trex products will increase to three times that of the fiscal year ended March 2022. Additionally, they are looking to enhance sales through strengthened development and promotion of Si power devices. Furthermore, for shareholder returns, a consolidated dividend payout ratio of over 20% is targeted, reflecting performance levels, and the target for the dividend on equity (DOE) is set at around 3% to expand stable and continuous shareholder returns. With a dividend yield approaching 5%, the future trends of the company, which operates on both fabless and foundry axes, are worth watching.