Sanken Electric reports first quarter operating loss

Japanese power semiconductor manufacturer Sanken Electric Co Ltd reported its first quarterly operating loss in at least five years on Tuesday, citing weaker demand and higher costs.

The company posted an operating loss of 1.2 billion yen ($7.7 million) for the three months ended June 30, compared with a 1.5 billion yen operating profit in the same period a year earlier. Revenue declined 15% year-on-year to 17.8 billion yen.

Sanken attributed the loss to softening demand in key markets, including automotive and industrial applications, as well as rising material and labor expenses. The company, which supplies power semiconductors to automakers and electronics manufacturers, said it expects the challenging conditions to persist through the second half of the fiscal year.

Management noted that while inventory levels at customers remain elevated, order flows have slowed, pressuring margins. The yen’s strength against major currencies also weighed on earnings, as overseas revenue accounts for roughly 60% of total sales.

For the full fiscal year ending March 2025, Sanken forecast revenue of 75 billion yen, down 5% from the prior year, and maintained its policy of reducing discretionary spending to mitigate cost pressures.

Shares of Sanken Electric were down 2.3% in Tokyo trading following the announcement, underperforming the broader market.