The rise of generative AI is increasing the need for data centers and associated power infrastructure equipment. Robust sales of optical devices and power cables boosted profits for Sumitomo Electric.
Investments in artificial intelligence have contributed to a rebound in Japan's manufacturing sector, which reported an 8 percent year-on-year net profit rise for the April to December 2024 timeframe, following a 6 percent decline during April to September.
Over half of the companies, 59 percent, reported profit gains, rising by 5 percentage points compared to last year and surpassing 50 percent for the second year in a row.
The chemical group Asahi Kasei reported a 68 percent rise in net profit driven by robust sales of plastics for chip production. Sumitomo Chemical saw a rise in sales of cleaning agents for chip production, while Sekisui Chemical benefited from tapes designed for securing substrates.
Advantages from investments linked to AI are proliferating, especially in the semiconductor materials sector. The food and biotech firm Ajinomoto reported unprecedented profits from April to December due to robust sales of insulating materials, where it holds a significant market share.
Mitsubishi Motors’ earnings decreased by 68 percent because of declining profitability in Southeast Asia and the US. Conversely, Toyota Motor, which has increased its full-year outlook, saw a 4 percent rise in profits from April to December.
As of February 7, the projected net profit of publicly traded companies for the fiscal year has increased by 4 percent compared to last year.