Pivoting to ceramics for semiconductor production equipment (2021)

Technical continuity as the core of the shift

It is too quick to read this shift as nothing more than the luck of catching a semiconductor boom. NGK was able to move its centre of gravity to products for semiconductor production equipment because the materials, precision-machining and joining technologies it had accumulated in power-line insulators and automotive exhaust ceramics connected directly to semiconductor components. The Tajimi plant of 2019, and the high-temperature ceramic carriers that support AI servers, were not an excursion into unrelated ground but the same ceramic technology redirected to a different application. The core of this restructuring lies in the attempt to bridge a founding business being thinned by electrification to the next pillar without changing the industry the company is in.

That said, it is too early to declare the bridge complete. The ¥90 billion operating profit set for the year to March 2026 is expected to be missed, and the year to March 2027 is forecast to fall again under the weight of research spending for the transition. Demand from semiconductor production equipment swings hard, and revenue lifted by a concentration of projects is, by the same token, a mirror of any turn in the market. Whether NGK can hold the discipline of allocating resources by its own version of ROIC while judging how long AI-driven demand will last — whether, in the end, the founding technology has been carried across to the next pillar — will be decided beyond that point.