Fujimi Incorporated (TSE: 5384): Stock Analysis
September 5, 2025
1. Introduction
Fujimi Incorporated is a leading global manufacturer of precision polishing materials for semiconductors, CMP slurries, and functional powder technologies. Established in 1953 and headquartered in Kiyosu, Aichi Prefecture, Japan, Fujimi operates globally with production and R&D bases in the U.S., Taiwan, Malaysia, China, and Europe.
The company is listed on both the Tokyo Stock Exchange Prime Market and the Nagoya Stock Exchange Premier Market under ticker 5384. With decades of expertise, Fujimi has built a strong reputation in polishing materials used in the fabrication of advanced semiconductors and has recently expanded its vision to become a “Powder & Surface Company.”
2. Stock Price Performance
Share Price (as of Sept 4, 2025): ¥2,022
52-Week Range: ¥1,536 – ¥2,449
Market Capitalization: ~¥162 billion
Recent Performance: Rebounded from April 2025 lows following strong Q1 FY2026 results
Stock Price Development:
Fujimi’s share price exhibited a strong upward trend from mid-2023 through March 2024, driven by:
Record-high FY2023 earnings: Revenue reached ¥58.4 billion (+13% YoY) and net profit exceeded ¥10.5 billion
Momentum from semiconductor sector: Market optimism surrounding AI chips and high-performance computing (HPC) boosted investor sentiment
Attractive dividend profile: The company raised its dividend to ¥73.3 per share, supporting a yield above 3%
Re-rating of Japanese equities: Broader investor rotation into high-quality Japanese mid-caps contributed to share price gains
However, the stock corrected sharply after April 2024, bottoming at ¥1,536 in early FY2025. Key factors behind the decline included:
Earnings contraction: FY2024 net profit fell to ¥6.5 billion (−38.6% YoY) and operating profit dropped by ~38%
Weaker global demand for semiconductors:
Smartphone and PC shipments declined amid post-COVID normalization and macroeconomic uncertainty
Inventory adjustments in logic semiconductors and foundry customers affected material demand
FX headwinds: Although yen depreciation generally supports export competitiveness, Fujimi recorded non-operating FX losses in FY2024 and FY2025 due to valuation adjustments on foreign currency assets and intercompany balances. These losses reduced reported net income despite stable operating performance.
Margin compression: Operating margin narrowed to 16.1% (vs. 22.7% in FY2023), triggering investor concerns about cost control
Cautious FY2025 guidance: While management forecasted a rebound, investors remained cautious due to persistent end-market softness
Profit-taking: After a ~60% rally from 2023 lows, investors rotated into other sectors amid global market volatility
Following this correction, the stock recovered gradually as FY2025 results confirmed a return to growth in both revenue and earnings. Positive sentiment was reinforced by solid Q1 FY2026 performance and ongoing capital investments to support long-term growth.
3. Financial and Operational Performance
Fujimi has demonstrated consistent top-line and profit recovery, especially in FY2025 after a temporary dip in FY2024. Despite fluctuations in net income due to foreign exchange impacts, the company maintained its dividend level, showcasing a commitment to shareholder returns.
Key Financial Metrics (FY2023–FY2025)
| Fiscal Year | Revenue (¥bn) | Operating Profit (¥bn) | Net Profit (¥bn) | EPS (¥) | Dividend (¥/share) | Payout Ratio (%) |
|---|---|---|---|---|---|---|
| FY2023 (Mar 2023) | 58.39 | 13.24 | 10.59 | 142.7 | 73.3 | 51.4 |
| FY2024 (Mar 2024) | 51.42 | 8.25 | 6.50 | 87.6 | 73.3 | 83.7 |
| FY2025 (Mar 2025) | 62.50 | 11.78 | 9.43 | 127.1 | 73.3 | 57.7 |
Analysis and Observations
Revenue Volatility:
FY2023 marked a revenue peak supported by strong semiconductor demand, particularly from AI and HPC-related applications.
FY2024 revenue declined sharply (−12% YoY), reflecting global semiconductor softness, notably in PCs and smartphones, and customer inventory adjustments.
Recovery in FY2025 (+21.5% YoY) was driven by improved demand for advanced semiconductor polishing materials and robust overseas contributions.
Profitability Trends:
Operating profit fell by ~38% in FY2024 as weaker volumes coincided with FX losses and cost inflation.
Margins improved in FY2025, but not to FY2023 levels, highlighting sensitivity to end-market demand swings.
Net profit followed a similar pattern, rebounding to ¥9.43 billion in FY2025 after a weak FY2024.
Capital Efficiency:
EPS dipped significantly in FY2024 to ¥87.6, but recovered to ¥127.1 in FY2025.
ROE also mirrored this trajectory, with FY2025 recovering to a solid 12.7%, according to the company’s reported figure.
The company’s asset-light model and high equity ratio (over 80%) ensure balance sheet stability.
Dividend Stability:
Dividends were kept constant at ¥73.3 per share across three years.
This policy emphasizes Fujimi’s commitment to shareholder returns, even as FY2024 profits contracted.
The payout ratio spiked to 83.7% in FY2024, but normalized to 57.7% in FY2025, indicating sustainability of distributions.
Overall Assessment:
Fujimi’s financials highlight both its resilience and cyclical exposure. The company weathered a downturn in FY2024 while sustaining dividends, then staged a strong recovery in FY2025. The ability to maintain high profitability during upturns and protect shareholder value during downturns underscores the quality of its business model, though investors should expect earnings volatility tied to semiconductor demand cycles.
4. Business Segments and Strategy
Segment Focus
Semiconductor Polishing Materials (CMP)
Fujimi is one of the few companies globally capable of supplying CMP slurries for leading-edge semiconductor nodes.
The company holds an estimated >50% global share in front-end polysilicon polishing slurries, with widespread adoption among top-tier logic and memory manufacturers.
Its products are indispensable in AI, HPC, and advanced logic chip fabrication, making this segment the backbone of Fujimi’s earnings.
Silicon Wafer Polishing
Fujimi commands a dominant 84–92% global market share in silicon wafer lapping and polishing agents.
This near-monopoly position stems from decades of R&D and close collaboration with wafer makers, ensuring unmatched quality and yield performance.
Customers rely on Fujimi’s products to achieve mirror-like finishes required for advanced device layers.
Functional Materials & New Fields
Expansion into titanium phosphate, thermal spray materials, and polishing solutions for automotive and electronics.
Though currently a smaller contributor, these new businesses are targeted to account for 20% of sales by FY2029, reducing reliance on semiconductor cycles.
Core Technologies (Sources of Competitive Advantage)
Fujimi’s long-term success is rooted in three proprietary core technologies developed through decades of R&D and customer collaboration:
Filtration, Classification & Purification
Removes oversized particles and impurities that could cause defects in semiconductor wafers.
Provides unmatched particle size control, a critical differentiator in leading-edge semiconductor processes.
Powder Technology
Controls particle morphology and enables homogeneous mixing of different materials.
Supports consistency and stability in slurry formulations where even slight variations can cause yield loss.
Chemical Technology
Designs and formulates dispersants, surfactants, and additives that enhance polishing performance.
Allows Fujimi to tailor solutions for specific customer needs, enhancing process compatibility.
Competitive Positioning
Global Leadership: Fujimi’s >80% share in wafer polishing agents and >50% in CMP slurries positions it well ahead of regional competitors in the U.S., Korea, and China.
Quality & Reliability: While global chemical giants (e.g., Cabot Microelectronics/CMC Materials, DuPont, Hitachi Chemical) compete in CMP slurries, Fujimi’s reputation for quality, low defectivity, and process customization ensures strong customer lock-in.
Customer Intimacy: Decades-long partnerships with leading wafer and device manufacturers (Japan, Taiwan, U.S.) create high switching costs. Fujimi is often the preferred sole supplier for critical steps.
Barrier to Entry: Replication of Fujimi’s slurry formulations and particle precision requires long development cycles, significant capital investment, and stringent quality control—dissuading new entrants.
Strategic Vision
Fujimi’s six-year mid-term plan aims to evolve into a full-fledged “Powder & Surface Company.”
Strengthen semiconductor-related core businesses to maintain global leadership.
Expand non-semiconductor and non-polishing segments to 25%+ of sales by FY2029.
Maintain R&D intensity and CAPEX (¥55 billion over 6 years) to drive both innovation and supply security.
Balance growth and stability, positioning Fujimi not only as a semiconductor material leader but also as a diversified advanced materials company.
5. Investment Outlook and Catalysts
Medium-Term Growth Potential in Precision CMP and Beyond
Fujimi’s investment outlook remains structurally positive, supported by secular tailwinds in semiconductor miniaturization and advanced wafer processing. As noted in the company’s medium-term strategy and securities reports, Fujimi maintains the world’s top market share in ultra-fine polishing materials for silicon wafers and has steadily built expertise in three core technological domains: powder control, chemical formulation, and filtration/precision classification. These competencies position the company as an indispensable partner in the increasingly demanding fields of wafer planarization (CMP) and high-precision abrasives.
Key Medium-Term Catalysts:
Structural Demand for CMP in Logic & Memory
With semiconductor node scaling accelerating toward 3nm and below, CMP usage per wafer continues to rise. Fujimi’s CMP slurries and abrasives are critical in enabling multilayer metallization and planarization processes, particularly in advanced logic and 3D NAND structures. Demand from leading-edge fabs—especially in Taiwan, Korea, and the U.S.—offers durable volume visibility.Global Foundry Capex Cycle
The company’s client base includes major wafer and device manufacturers actively investing in new fabs across the U.S., Japan, and Southeast Asia. Fujimi is directly benefiting from this capex wave through long-term supply agreements and co-development projects. According to the securities report, Taiwanese and American subsidiaries alone contributed over 20% of consolidated sales in FY2025.Diversification Beyond Semiconductors
While approximately 75% of Fujimi’s revenues are linked to semiconductor applications, the company is expanding its presence in non-semiconductor precision polishing markets—such as HDD substrates, optical components, ceramics, and dental materials. These adjacent verticals provide cyclical resilience and open long-tail growth opportunities.Capital Expenditure and Facility Expansion
To meet growing demand, Fujimi is investing aggressively in production capacity both domestically (Japan) and overseas (Malaysia, Taiwan). The mid-term plan outlines a capex commitment of ¥55 billion over six years. The company aims to achieve a more balanced revenue split between semiconductor and non-semiconductor segments by FY2029.Customer Entrenchment through Co-Development
Fujimi’s R&D model is deeply integrated with its clients’ development roadmaps. Through joint formulation and customization of CMP slurries, the company embeds itself into its customers’ process flows, enhancing switching costs and technological lock-in. This approach supports long-term revenue durability and product adoption.
Overall Assessment:
Fujimi is positioned to benefit not only from the continued advancement of semiconductor technology but also from diversification into non-chip applications that require the same level of precision and material science. Its business model—anchored in close customer integration and technical leadership—offers visibility and resilience, even in a cyclically sensitive industry.
6. Risks
Multi-Dimensional Exposure in a Technically Complex, Cyclical Industry
Despite Fujimi’s defensible market position and advanced material expertise, its business model entails several structural and cyclical vulnerabilities. These risks are inherent to the company’s role as a mission-critical but highly specialized supplier in a concentrated, globalized value chain. Understanding these exposures is key to assessing the durability of future returns.
Key Risk Areas:
Semiconductor Cycle Dependency
Approximately 75% of Fujimi’s revenue remains tied to semiconductor-related applications. This exposes the company to fluctuations in logic and memory fab utilization rates, inventory corrections, and capex cycles. While AI- and HPC-driven demand offers long-term support, short- to mid-term revenue visibility is constrained by end-market volatility.Customer Concentration and Qualification Lag
Fujimi maintains deep relationships with a limited number of Tier-1 customers. Although this ensures process integration and high switching costs, it increases exposure to volume shocks if key clients alter technology nodes, sourcing strategies, or in-house slurry capabilities. The 2–3 year qualification timeline also delays revenue contribution from new customer wins, limiting agility.FX Sensitivity and Earnings Volatility
With over 70% of consolidated sales generated overseas, Fujimi’s earnings are highly exposed to foreign exchange fluctuations. While a weaker yen may boost competitiveness, recent fiscal periods (e.g., FY2024–FY2025) have shown that FX valuation losses can meaningfully distort net profit, complicating investor interpretation of core performance.Raw Material Fragility and Supply Chain Stress
Advanced slurries require highly pure, uniformly shaped abrasives and chemical agents. Disruptions in global logistics or materials (e.g., rare earths, silica, dispersants) may result in cost spikes or delivery constraints. Given Fujimi’s precision requirements, substitution of raw materials is non-trivial and often impractical without requalification.Geopolitical and Regional Risk
Fujimi’s operational exposure to the U.S., Taiwan, China, and Southeast Asia brings strategic opportunity but also geopolitical risk. Potential flashpoints—such as U.S.-China tensions, Taiwan Strait instability, or export control tightening—could delay customer fab ramps or impose new compliance burdens on Japanese suppliers like Fujimi.Execution Risk in Capital and Business Expansion
The company’s medium-term plan calls for ¥55 billion in CAPEX through FY2029, including the Kakamiyama Plant and new R&D facilities. Execution delays, cost overruns, or underperformance in non-semiconductor segments could impair ROI and dilute capital efficiency. The success of new business domains remains uncertain at this stage.
Overall Risk Assessment:
Fujimi’s business enjoys high technical barriers to entry and customer loyalty, but these strengths also concentrate its exposures. Investors should carefully monitor customer dependency, macro-cyclicality, supply chain resilience, and strategic capital execution, as these factors will define not only earnings volatility but the company’s ability to transition into a more balanced, diversified materials platform.
7. Conclusion
Fujimi Incorporated demonstrates a resilient business profile with global leadership in semiconductor-related polishing materials, underpinned by proprietary technology and a stable financial structure. Its strategic investments—most notably the upcoming Kakamiyama Plant and the new R&D center—signal a forward-looking approach to innovation and non-semiconductor diversification.
The company offers a blend of:
Operational stability: Solid profit recovery in FY2025 and stable dividend policies
Technological moat: Dominant market share in CMP and silicon wafer polishing
Growth potential: Upside from AI/HPC semiconductor demand and adjacent fields
ESG integration: Alignment with global standards in governance, capital policy, and sustainability
From a valuation standpoint, Fujimi trades at:
PER: ~15.9× based on FY2025 EPS of ¥127.1
PBR: ~1.97×
Dividend Yield: ~3.6%
These valuation metrics suggest a moderate price level reflecting both earnings stability and future growth potential. While not aggressively undervalued, the stock may offer an appealing total return profile, particularly for investors seeking sectoral exposure with lower volatility than chip manufacturers.
Investment Consideration:
Given its sectoral positioning, capital discipline, and visibility on future growth drivers, Fujimi may be regarded as a high-quality candidate for medium- to long-term portfolios, especially those focused on dividend yield and structural semiconductor tailwinds. That said, investors should continue to monitor risks related to foreign exchange movements, capex execution, and semiconductor market cyclicality.
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