AI Demand Drives Japanese Electronic Component Makers to Raise FY2026 Outlook
Seven major Japanese electronic component manufacturers have revised upward their consolidated earnings forecasts for the fiscal year ending March 2026, driven by stronger-than-expected demand related to artificial intelligence (AI). All seven companies raised their sales forecasts, while five also increased their net profit outlooks.
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The weaker yen compared with initial assumptions and a smaller-than-expected impact from U.S. tariff policies also contributed to the improved outlook. In addition, rising demand for AI-related peripheral components provided a strong tailwind. However, companies remain cautious about the automotive sector, where slowing electric vehicle (EV) sales and changes in development strategies are affecting demand.
TDK, Kyocera, Murata Manufacturing, Alps Alpine and Taiyo Yuden all revised their operating profit forecasts upward.
Executives across the industry indicated that the impact of U.S. tariffs would be limited. TDK President Noboru Saito said, “We believe the impact of U.S. tariff measures will be limited.” Murata Manufacturing President Norio Nakajima noted that concerns about an economic slowdown stemming from reciprocal tariff policies have “decreased.” Kyocera President Hideo Tanimoto explained that the company raised its earnings forecast because “the impact of currency movements and tariff issues was smaller than initially expected.”
Strong AI-related demand continues to support growth. In addition to multilayer ceramic capacitors (MLCCs) used in data centers and AI servers, demand for motors and other components is also rising. Murata Manufacturing and Taiyo Yuden expect continued growth in MLCC demand for AI servers. Yoshihisa Kainuma, Chairman and CEO of Minebea Mitsumi, which manufactures fan motors for data centers, said there remains “significant room for growth” in supplying various products for AI servers.
Meanwhile, revisions to automakers’ EV strategies are beginning to affect electronic component suppliers. For example, Alps Alpine has postponed certain development projects as customers shift focus from EVs to hybrid vehicles (HVs), and expects related development costs to be recorded in the second half of the fiscal year. TDK has also reported weaker sales of automotive passive components amid slowing EV demand.
In addition to their earnings announcements, company executives are expected to outline policies related to private investment in the United States, following agreements announced by the Japanese and U.S. governments in late October. TDK President Saito said the company is “in the process of finalizing details.” Regarding the proposed $15 billion (approximately ¥2.3 trillion) investment framework, Murata Manufacturing President Nakajima emphasized that it does not necessarily involve direct investment, adding that the company will contribute through component supply and efforts to strengthen supply chains.
