Oxide (6521) Q1 FY2027 Earnings Call Q&A Deep Dive Report

Oxide (Securities Code: 6521) provided detailed explanations regarding a significant turning point in its performance and future growth strategies during the Q&A session of its Q1 FY2027 earnings call. The company plans to transition from an operating loss in Q4 to an operating profit in Q1, with the semiconductor business expected to be a key driver of profitability improvement.

Earnings Highlights and Factor Analysis

During the earnings call held on July 15, 2026, the company disclosed that despite recording an operating loss in Q4, it plans to achieve an operating profit in Q1 . This turnaround is primarily attributed to improved profitability, particularly in the semiconductor business, coupled with portfolio diversification and a strengthened revenue structure. The Q4 operating loss was explained by factors such as a concentration of sales to specific customers and delays in initiatives to improve profitability.

For the Q1 outlook, the company projects an operating profit of 170 million yen while simultaneously planning to record R&D expenses of 440 million yen . These R&D expenses are positioned as strategic investments aimed at supporting mid-to-long-term growth rather than short-term profit contributions. Specifically, they include adjustments in the timing of development cost recognition and some upfront recording of manufacturing costs associated with the transition to mass production. The company views R&D as a crucial investment for maintaining and strengthening its mid-to-long-term competitiveness, emphasizing continuous investment in future growth drivers.

The page above refers to the Q1 operating profit forecast, R&D expense plan, and the status of the data center Faraday rotator business. Notably, the explanation that R&D expenses of 440 million yen are an investment for mid-to-long-term growth demonstrates the company's forward-looking management stance. Furthermore, the delay in revenue recognition for the data center Faraday rotator business in Q4 was due to transaction details with customers and the company's business progress, with sales expected to be recognized from Q1 onwards.

Status and Strategy of Key Business Segments

1. Semiconductor Business : The semiconductor business is positioned as a primary driver for achieving operating profitability in Q1. To meet increasing demand, the company is actively pursuing fundamental expansion of its production capacity , particularly through capital investments including the 4th factory. Alongside production capacity enhancement, human resource development and securing manufacturing talent are also critical initiatives to address bottlenecks. The company plans to expand its business through close dialogue with customers, while closely monitoring changes in the semiconductor market environment in Q1 and beyond.

2. Faraday Rotator Business for Data Centers : Despite the revenue recognition delay in Q4, the market for data center Faraday rotators is expected to expand further. The company is focusing on stabilizing its supply system and expanding production capacity . Efforts to acquire new customers are also underway, with the business anticipated to be a mid-to-long-term growth driver.

3. Healthcare Business : Regarding the healthcare business, discussions on transaction terms with customers are ongoing, and the company plans to disclose information as much as possible.

This page provides detailed explanations regarding the strategic positioning of R&D expenses as an investment, the Q2 and subsequent earnings outlook, the market environment for the semiconductor business, the healthcare business, and the progress in new business areas. In particular, the point that R&D expenses are crucial investments for maintaining mid-to-long-term competitiveness is extremely important for understanding the company's future-oriented strategy. It also suggests that semiconductor market trends and the status of Faraday rotator revenue recognition will continue to impact performance in Q2 and beyond, making these trends noteworthy.

Future Growth Strategy and New Businesses

Oxide is actively investing in the development of new business areas to support mid-to-long-term growth.

1. Lasers for Quantum Computers : The company has developed 302nm lasers for quantum computers, emphasizing their technological differentiation and high market expectations. The 302nm laser has the potential to become a core technology for the social implementation of quantum computers. Furthermore, the development of 436nm lasers is also progressing, with future business expansion anticipated.

2. Co-Packaged Optics (CPO) : In the optical fusion (CPO) sector, the market continues to expand, centered around CPO. The company is advancing business development utilizing deep ultraviolet lasers in the microfabrication domain required for advanced packaging . This technology is attracting attention for its potential to contribute to faster data transmission and lower power consumption in data centers and high-performance computing.

3. Power Semiconductors (SiC) : In the SiC power semiconductor field, the company is pursuing long-term initiatives aimed at the social implementation of power infrastructure. Currently, customer evaluations are underway through sample provision, and this is positioned as a growth driver expected to make mid-to-long-term profit contributions .

These new business areas are positioned as mid-to-long-term growth drivers rather than contributors to immediate short-term profits. The company's strategy is to establish future revenue foundations through continuous investment in these fields.

This page explains the detailed initiatives for new businesses that will serve as mid-to-long-term growth drivers , such as 302nm lasers for quantum computers, Co-Packaged Optics (CPO), and SiC power semiconductors. Specifically, it concretely describes the future potential and market impact of each technology, including the 302nm laser as a core technology for quantum computer social implementation, CPO's collaboration with advanced packaging technology, and SiC power semiconductors aiming for social implementation in power infrastructure. This makes it a highly important source of information for deeply understanding the company's technological advantages and the direction of its growth strategy .

Outlook and Challenges

While the company anticipates a transition to operating profit in Q1, it states that it needs to carefully assess the impact of Faraday rotator revenue recognition delays and semiconductor market trends on performance in Q2 and beyond. However, from a mid-to-long-term perspective, the company's policy is to aim for sustainable growth and improved profitability through continuous investment in R&D and the cultivation of new businesses . Enhanced production capacity, supply chain stabilization, and close collaboration with customers will be crucial elements for future business expansion.