Hitachi Kokusai Electric Inc. (E01776) Stock Price

Hitachi Kokusai Electric is an electronic equipment manufacturer with wireless communication systems, broadcasting equipment, and semiconductor manufacturing equipment as its core businesses. The company operates through two main pillars: video and communication solutions, and thin-film process solutions, handling a wide range of products from disaster prevention radio systems to cutting-edge semiconductor equipment.

The company's customers span government agencies, broadcasting stations, telecommunications operators, and semiconductor manufacturers. In particular, the semiconductor manufacturing equipment business maintains high profitability backed by growing global demand, while the wireless communication business has a stable revenue base serving domestic municipalities and transportation operators. The revenue structure relies not only on equipment sales but also on ongoing maintenance services as a key income source.

Business segments are divided into video and communication solutions and thin-film process solutions. The former includes disaster prevention administrative radio systems, broadcast transmitters, and surveillance camera systems, while the latter's main products are thermal processing equipment and plasma equipment used for thin-film formation on semiconductor wafers. Through 17 domestic subsidiaries and overseas operations, the company conducts business globally, with increasing presence in Asian, European, and North American markets.

Hitachi Kokusai Electric has set a clear target of 12% adjusted operating profit margin in its three-year medium-term management plan through fiscal year 2018. The company positions the qualitative transformation of social infrastructure and the advent of a smart society as growth opportunities driven by semiconductor industry changes. It aims to improve performance through leveraging its accumulated technological capabilities, collaboration with the Hitachi Group, and co-creation with customers. With support from new capital partners, the company is accelerating solutions to business challenges and establishing a more agile management structure.

In the Video and Communications Solutions business, the company is pursuing bold portfolio transformation through selective focus. While traditional wireless systems and video surveillance systems face declining demand, the company is concentrating resources on new areas including public facility video security solutions leveraging ultra-high-sensitivity cameras and image processing technology, and disaster prevention and crisis management solutions that centralize information management during emergencies. This approach builds a stable business foundation less vulnerable to short-term performance fluctuations.

In the Film Process Solutions business, the company is executing a strategy to capture growing semiconductor demand driven by IoT market expansion. It aims to expand vertical equipment market share through mass production scaling of new products and technological advancement, while strengthening treatment equipment—which improves film quality after deposition—as a new business area. Particularly in the rapidly growing Chinese market, the company has established a new organization and is actively pursuing market development and share expansion through partnerships with local partners.

Regarding technological innovation, the company prioritizes advance investment through swift and optimal decision-making to keep pace with rapid technological progress in semiconductor manufacturing equipment. In the service business sector, the company is advancing product lifecycle business evolution through renovation proposals for long-term-use equipment, expanded used equipment sales, and remote maintenance service expansion. This strategy aims to grow long-term service revenues beyond equipment sales alone.