Profitability DeteriorationThe shift to a material net loss (JPY11.7bn) and recurring quarterly operating losses highlight persistent profitability stress. Combined with rising depreciation, this undermines retained earnings and makes earnings recovery dependent on sustained pricing, improved mix, and utilization—risks that can persist several quarters.
Negative Free Cash Flow TrendDespite strong operating cash flow, multi-year negative free cash flow and a meaningful decline in cash balances reflect heavy investing and cash absorption. This structural FCF shortfall restricts optionality for sustained capex, dividend upkeep, or share actions without external funding if investment needs re-accelerate.
Structural 200mm Decline & Inventory OverhangA multi-year contraction in 200mm commodity wafers erodes a portion of SUMCO's revenue base and margins. High legacy inventory and expected normalization will further depress shipments and pricing for legacy nodes, pressuring margins and prolonging recovery in aggregate wafer demand and profitability.