SUMCO Corp

3436: XTKS (JPN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	JPY 2,538.00	Hwjz	Tqhkdxppd

Sumco Earnings: Short-Term Balance Sheet Pressure Justified by More Customers in Japan

Phelix Lee

Feb 19, 2024

We keep our Sumco fair value estimate at JPY 1,940, despite the disappointing outlook for the first half of 2024, as the firm echoes chipmakers’ comments as to a second-half recovery, and there is higher visibility on new foundries in Japan. Sumco is overvalued, in our opinion, as we believe the market discounted solvency risks following Sumco’s higher debt levels to fund its countercyclical expansion drive.

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