Nitto Denko, the Osaka-based maker of industrial tapes, optical films and circuit materials, booked a 15.4% rise in operating profit for the quarter through June 30, to ¥49.2bn, as demand for materials used in AI servers and data centers offset a slump in components for laptops and tablets. Revenue rose 10.3% to ¥271.7bn, and profit attributable to shareholders climbed 8.2% to ¥33.9bn.
Two forces did the heavy lifting. First, demand: the company's Industrial Tape segment, which supplies process materials for semiconductor memory and ceramic capacitor production, grew revenue 17.8% to ¥101.1bn and operating profit 64.9% to ¥16.3bn, helped by wider adoption of its battery-fixing electrically releasable tape in high-end smartphones and by rising AI-server output. Second, currency: the yen weakened 9.3% against the dollar year on year, averaging ¥159.3, which alone added ¥8.7bn to operating profit.
The picture inside Optronics, Nitto's second-largest segment, was mixed. Circuit materials revenue jumped 37.0% to ¥42.5bn, driven by high-precision smartphone substrates and by CIS suspension components feeding the high-capacity hard-disk drives that data centers need for generative-AI storage. But information materials revenue fell 9.9% as memory-chip price spikes forced PC and tablet makers to cut production, denting demand for Nitto's optical films. Segment operating profit slipped 3.8% to ¥35.4bn.
The Human Life segment, which includes nucleic-acid contract manufacturing, narrowed its operating loss to ¥317mn from ¥1.63bn a year earlier, after a large nucleic-acid production contract moved into its commercial-manufacturing stage in the prior quarter, lifting segment revenue 25.6% to ¥40.8bn.
On the back of the quarter's performance and a revised currency assumption, Nitto Denko raised its full-year forecast, first set in April, to ¥1.11tn in revenue and ¥200.0bn in operating profit, from ¥1.07tn and ¥193.0bn respectively.
| Metric | April Forecast | July Forecast | Change |
|---|---|---|---|
| Revenue | ¥1.07tn | ¥1.11tn | +4.2% |
| Operating profit | ¥193.0bn | ¥200.0bn | +3.6% |
| Net profit attributable to owners | ¥141.0bn | ¥142.0bn | +0.7% |
| Assumed USD/JPY rate | ¥153.0 | ¥158.0 | — |
The new outlook assumes an average exchange rate of ¥158.0 per dollar for the year, up from ¥153.0 in April, and still nets in roughly ¥10bn of higher raw-material costs tied to Middle East tensions, an amount the company says it is largely offsetting through price adjustments. Nitto also confirmed a ¥4 dividend increase to ¥64 per share for the year and a ¥50bn share buyback running from April to August 2026. For customers and rivals across electronics supply chains, the quarter is a data point on how far AI infrastructure spending is now reaching into the materials layer that most investors never see.