Macnica's Semiconductor Arm Doubles Profit; Full-Year Plan Raised 30%

Macnica Holdings raised its full-year operating profit plan by roughly 30% on November 2, 2026, after its Semiconductor Business posted interim operating profit of ¥29,258 million (about $185.2 million), up 117.1% year on year. The same briefing cut the full-year loss forecast for the CPS Solutions Business to ¥8 billion (about $50.6 million) from ¥5.6 billion. The commercial picture is now simple: chips pay for buses.

President Kazumasa Hara told the fiscal 2027 second-quarter briefing: "Semiconductors and cybersecurity are both in extremely good shape — you could call them booming." CFO Makoto Okawara said at the outset: "We have raised the outlook announced in May. Both sales and profit are being revised up by about 30%." Boom, yes. But one segment still burns cash. The company said little about when that stops.

What drove the numbers?

Group net sales reached ¥831,293 million for the interim period, up 44.5% from the year-earlier figure of ¥575,000 million. Operating profit rose 91.5% to ¥33,518 million. Ordinary profit grew 122.4% to ¥32,751 million. Interim net profit doubled to ¥22,278 million, up 102.1%.

The Semiconductor Business supplied almost all of it: net sales of ¥721,339 million, up 46.7%, and operating profit of ¥29,258 million, up 117.1%. Segment operating margin improved from about 2.7% to about 4.1%, according to the company's disclosed figures. Scale translated directly into margin.

By application:

• Industrial equipment: +83%. Market recovery in Japan and overseas, plus share taken from other trading companies through business transfers.
• Automotive: +25%. Orders recovering as semiconductor inventory adjustment ends.
• Computers: +23%. Led by data center and AI server demand, at roughly ¥100 billion (about $633.1 million) in sales.

By product category, analog chips led at ¥238,323 million, up 74.8%, about 33% of the total. Memory grew 118.6% to ¥61,431 million, helped by price increases. Microcontrollers rose 31.0% to ¥101,501 million, crossing ¥100 billion for the first time. By region, Japan grew 30% while overseas surged 75%; overseas industrial equipment rose 118% and automotive 78%.

Hara confirmed the source of the industrial gains: "Industrial equipment is extremely strong both in Japan and overseas," with overseas "share gains from taking over business from other trading companies." Trading-company share transfer is durable only until competitors regroup. The company did not address that risk.

How solid is cybersecurity?

The Cybersecurity Business grew net sales 31.2% to ¥105,887 million, with operating profit up 14.8% to ¥8,907 million. In Japan, endpoint security rose 57%, cloud security 38%, and web applications 35%. Overseas sales rose 19% overall, an increase of ¥5.7 billion (about $36.1 million), though India fell 29% on the reversal of one large project.

Hara framed AI as a demand driver. "AI has enabled attackers to efficiently find individual flaws across large numbers of sites. Products offered commonly by security vendors alone are insufficient, and per-company countermeasures and attack monitoring are becoming important," he said, pointing to the company's Antelas service.

The caveat came from the CFO. Okawara said "experimental costs — or rather, costs — are slightly exceeding expectations," and the segment's full-year operating profit forecast was lowered slightly. Revenue is growing faster than profit. That gap is the story.

Why did the CPS loss widen?

CPS Solutions, which runs the autonomous-driving EV bus business, posted net sales of ¥4,066 million, up 25.9%, but an operating loss of ¥4,647 million, wider than ¥3,728 million a year earlier. Hara cited 93 demonstration experiments, mostly B2G work with local governments, and six projects in regular operation. The shift to regular operation lags the initial plan. Changes to the subsidy system slowed local-government decisions, and a customer's cancellation of a vehicle development program terminated one project.

Asked when the delay would be resolved, Hara offered no timeline: "Changes to the subsidy system are making local governments take longer to decide on adoption. However, six projects have been selected under programs of the Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of Internal Affairs and Communications, and we want to steadily move from demonstration to regular operation." Okawara limited himself to saying, "We want to turn it around somehow." The full-year loss of ¥8 billion sits essentially flat against the prior year's ¥7.9 billion. The investment phase is dragging.

What did the company promise shareholders?

The full-year forecast now calls for net sales of ¥1,670,000 million, up 37.5%, and operating profit of ¥67,500 million, up 60.9%, at an assumed ¥158 to the dollar. Semiconductor segment operating profit was raised to ¥56.5 billion (about $357.7 million) from ¥37.5 billion.

The dividend plan is ¥90 per share for the year, ¥45 interim and ¥45 year-end, up ¥20. Okawara explained the arithmetic: a ¥80 dividend would have left DOE at 4.7%, short of 5%. A ¥5 billion (about $31.7 million) buyback, capped at 1.6 million shares between November 4 and December 21, 2026, lifts the total payout ratio to 46%, inside the 40–50% target.

Under the medium-term plan covering fiscal 2025–2027, Macnica executed two strategic investments each in the semiconductor effective-value distribution and service solutions models from a ¥50–80 billion growth budget, acquired Denmark's Indesmatic in May and a majority of India's Electronica in September, and made UAE-based Cybersec IT Consulting a subsidiary. Company-wide AI-related business grew 31%, with infrastructure-related AI products up 42%.

On demand durability, Hara said: "Our order backlog is building, and strength will continue for the time being." Whether the 2027 international horticultural expo can convert autonomous-bus demonstrations into commercial operation — and whether chip distribution margins hold — will decide whether the raised plan survives contact with fiscal reality.