A global niche leader run on ROIC — Inoue Masatake and the generative-AI boom (2022)

Turning an inherited strength into a yardstick

The core of this decision is not recovery from a crisis but the move to a next stage: how to manage, by the capital market’s yardstick, a business that has already established a world-class niche position. If Nakano Mitsuo’s sixteen years were the era that settled what the company earns from — polishing materials — then Inoue Masatake’s task was to translate that earning power back into measures such as ROIC and shareholder returns. That he did not take down the banner of ROIC management even while walking straight into a semiconductor downturn on arrival suggests something more than simple continuation of a predecessor’s line.

That said, the sharp recovery driven by generative-AI demand owes a great deal to a favourable external environment rather than to Inoue’s own decisions. Dependence on polishing materials has reached more than 70% of consolidated operating profit, and if the semiconductor cycle turns down again, the swing in results could easily return. Whether the ¥20 billion operating-profit target for fiscal 2035 set out in the medium-term plan Shinka 26–30 becomes an answer to the long-standing problem of single-business dependence, or a choice that deepens that dependence further, is left to the management still to come.