Japan Chipmaker Denso Reports 41% Profit Decline for Quarter

Denso Corporation lowered its full-year operating forecast to 480 billion yen from 560 billion yen for the year ending March 31. File photo: Reuters.

First-quarter profit at Denso Corporation, a Japanese company that makes semiconductors for cars, fell 41% over lower production and higher input and logistics costs.

The company, a major Toyota supplier, has been hit by the global shortage of semiconductors.

Denso’s operating earnings of 63.6 billion yen ($473.32 million) for the three months to June 30 fell short of an average estimate of 80.8 billion yen from 10 analysts according to Refinitiv data. A year earlier, the company earned 107.2 billion yen.

The company lowered its full-year operating forecast to 480 billion yen from 560 billion yen for the year ending March 31.

The two-year long semiconductor crunch and supply disruptions caused by China’s Covid-19 curbs have forced car makers including Toyota to repeatedly cut production.

On Thursday Toyota said production for the April-June quarter fell 10% short of its initial plan.

But a recent glut in chip supplies due to a pullback in demand in other markets like consumer electronics may finally start to ease things for car makers.

Reuters, with additional editing by George Russell

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.