Megachips

Basic Information

Stock Code
6875
Industry
Electrical Equipment
Category Detail
Semiconductors & Electronic Components
Prefecture
Osaka Prefecture
Establishment Year
April 1990
Listing Year
August 1998
Official Website
https://www.megachips.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Kioxia Holdings, Digital Media Professionals, Maruo Cal, Sanyo Denki, Socionext, Sanken Electric, Renesas Electronics, Axel, Zain Electronics, Hosiden, Aoi Electronics, Shindengen Electric Mfg., Rohm

Overview

Megachips is a semiconductor manufacturer founded in 1990, with system LSI development as its main business, and has established a solid position in the industry by supplying ASICs to major customers such as Nintendo.

Current Situation

Megachips recorded consolidated sales of approximately 70.7 billion yen and operating profit of approximately 6 billion yen in the fiscal year ended March 2023, maintaining a stable revenue base. Its core system LSI business focuses on designing and selling custom LSIs primarily for Nintendo, with image transfer systems as a key technology area. Production is outsourced externally for efficiency, and the company invests heavily in research and development. In recent years, it has spun off part of its systems business to pursue business selection and concentration. On the environmental front, it is working on energy-efficient LSI development with sustainability in mind. In the medium to long term, it aims to strengthen its business foundation suitable for the Prime Market and expand globally, targeting advanced LSI development for AI and IoT. Recent developments include enhancing shareholder returns through share buybacks.

Trivia

Interesting Facts

  • One of Japan's leading LSI companies supplying ASICs for Nintendo game consoles for many years
  • Unique business structure where custom ASICs account for the majority of sales
  • Suppresses factory equipment investment through outsourced production, concentrating resources on R&D
  • Headquartered in Osaka with a nationwide customer base
  • Tokyo Stock Exchange Prime-listed company included in small-cap index
  • President Tetsushi Hikawa is known as a leader versed in semiconductor technology
  • High trust in mask ROM supply within the game console industry
  • Possesses technology for image transfer systems and focuses on new field development
  • Has been selected for METI advanced technology subsidies
  • Highly evaluated for development capabilities responding to unique customer needs
  • Continues OEM-centric business model since founding
  • Actively utilizes technology collaborations and license agreements within the industry
  • Research labs consolidated in Osaka City
  • Reorganized production and development organizations after establishment for efficiency
  • Outsourcing partners are diverse companies mainly in Asia

Hidden Connections

  • Long-term collaboration with Nintendo, involved in game console hardware development
  • Deep relationships with domestic game software manufacturers through mask ROM technology
  • Strengthened technology base through management integration with Kawasaki Microelectronics
  • Rich experience in collaborations with trading companies, including joint venture with Mitsui & Co.
  • Shareholders include not only financial institutions but also many investment trusts and individuals
  • Prime Market transition strengthened market positioning
  • Head office in Shin-Osaka Hankyu Building with excellent transportation access
  • Transferred part of systems business externally to execute business selection and concentration

Future Outlook

Growth Drivers

  • Expansion of LSI demand for AI and IoT
  • Advancement and diversification of customer-specific ASICs
  • Market expansion of image processing technology
  • Strengthening products for automotive and medical fields
  • Increasing demand for energy-efficient technologies
  • Cost optimization through outsourcing
  • Expansion of global production system
  • Strengthened government support in semiconductor market
  • Increasing demand for 5G communication equipment
  • High-functionalization of digital home appliances
  • Product development compliant with environmental regulations
  • Expansion of shareholder returns through capital policy

Strategic Goals

  • Achieve over 40% of total sales from AI and IoT fields
  • Obtain domestic and international certifications for energy-efficient LSI technology
  • Expand and diversify global customer base
  • Maintain over 70% ratio of high value-added products
  • Build sustainable environmental management model
  • Continuously improve shareholder return ratio
  • Maintain optimization of external production outsourcing system
  • Strengthen engineer training programs
  • Actively create and invest in new businesses
  • Promote open innovation through collaborations inside and outside the industry

Business Segments

Custom LSI Design & Development

Overview
Designs custom LSIs for various industries, providing high-performance and energy-efficient products.
Competitiveness
Cost efficiency from outsourced production and strong technological development capabilities
Customers
  • Game Console Manufacturers
  • Home Appliance Manufacturers
  • Communication Equipment Manufacturers
  • Medical Device Manufacturers
  • In-Vehicle Equipment Manufacturers
  • Industrial Equipment Manufacturers
Products
  • Custom ASIC Development
  • Image Transfer LSI
  • Sensor LSI
  • Communication Control LSI
  • Medical LSI
  • Automotive LSI

Software Cartridge Development

Overview
Provides high-quality software cartridges for game consoles and similar devices.
Competitiveness
Reliability tailored to Nintendo products
Customers
  • Game Software Manufacturers
  • Home Appliance Manufacturers
Products
  • Game Cartridges
  • Storage Devices

Semiconductor & Electronic Component Sales

Overview
Ensures stable supply of high-quality electronic components to support production lines.
Competitiveness
Diverse semiconductor product lineup
Customers
  • Electronic Device Manufacturers
  • Electrical Equipment Assemblers
Products
  • Semiconductor Devices
  • LSI Packages

Embedded Systems Development Services

Overview
Designs and develops embedded device systems according to customer needs.
Competitiveness
Expertise across a wide range of industries
Customers
  • Telecommunications Industry
  • Medical Device Manufacturers
  • Automotive Manufacturers
Products
  • Embedded Software Development
  • Custom System Design

LSI Provision for Video Equipment

Overview
Provides LSIs for high-quality video transmission and processing to support the video industry.
Competitiveness
High-performance, low-latency technology
Customers
  • Video Equipment Manufacturers
  • Broadcasters
Products
  • Video Transmission LSI
  • Image Processing LSI

Automotive Semiconductor Solutions

Overview
Provides highly reliable semiconductor products for automotive applications.
Competitiveness
Strict quality control system
Customers
  • Automakers
  • Automotive Parts Suppliers
Products
  • Control LSI
  • Sensor LSI

LSI Solutions for Medical Devices

Overview
Provides highly reliable LSIs tailored to the needs of medical sites.
Competitiveness
Design technology specialized for medical field
Customers
  • Medical Device Manufacturers
  • Medical Institutions
Products
  • Embedded Medical LSI
  • Measurement Control LSI

Security LSI Development

Overview
Provides LSIs excelling in data protection and authentication technology.
Competitiveness
Advanced encryption technology and reliability
Customers
  • IT Companies
  • Financial Institutions
Products
  • Encryption LSI
  • Authentication LSI

Electronic Component Procurement Services

Overview
Support business with strengths in component procurement and supply chains.
Competitiveness
Extensive component lineup
Customers
  • Electronics Manufacturers
  • Industrial Equipment Manufacturers
Products
  • Semiconductor Components
  • Electronic Modules

Development Support Tool Provision

Overview
Provides various software tools to improve design and development efficiency.
Competitiveness
Customization to customer needs
Customers
  • LSI Design Companies
  • Electronic Device Manufacturers
Products
  • Design Verification Tools
  • Debugging Support Software

Custom Software Development

Overview
Offers software development services specialized to customer specifications.
Competitiveness
Flexible responsiveness and development track record
Customers
  • Manufacturing Industry
  • Machinery Manufacturers
Products
  • Embedded Software
  • System Integration

Semiconductor Manufacturing Outsourcing Management

Overview
Management services optimizing quality and costs for external production outsourcing.
Competitiveness
Extensive network of outsourcing partners
Customers
  • Semiconductor Design Companies
  • Electronics Companies
Products
  • Outsourced Production Management
  • Quality Assurance Services

Competitive Advantage

Strengths

  • High capability in customer-specific LSI design
  • Production efficiency through outsourcing
  • Ownership of image transfer system technology
  • Broad semiconductor product lineup
  • Robust customer base (Nintendo and others)
  • Strong research and development capabilities
  • Flexible custom response ability
  • Stable financial foundation
  • Trust from Tokyo Stock Exchange Prime listing
  • Active shareholder return measures
  • Diverse B2B business expansion
  • Energy-efficient LSI development technology
  • Product supply to multiple industries
  • Long years of industry experience and track record
  • Strategic business division and integration

Competitive Advantages

  • Long-term stable supply record of ASICs for Nintendo
  • High customization capability in design technology
  • High-efficiency production system via outsourcing
  • Market needs response through LSI development in diverse fields
  • Technological superiority in image transfer
  • Sound financial position with high equity ratio
  • Flexible product design for global markets
  • Rapid business deployment adapting to market changes
  • Stable trading partner network
  • Improved reliability from Tokyo Stock Exchange Prime listing
  • Technology development investment focused on specialized fields
  • Prompt customer support system
  • Energy-efficient LSI development incorporating latest technologies
  • Multi-faceted product portfolio construction
  • Flexible capital policy and shareholder returns

Threats

  • Intensifying international competition in semiconductor market
  • Instability in global semiconductor supply chains
  • Risk of demand fluctuations from major customers
  • Difficulty responding to pace of technological innovation
  • Market share loss due to emerging competitors
  • Investment restraint from economic downturn
  • Cost increase risk from exchange rate fluctuations
  • Burden of complying with stricter environmental regulations
  • Intensified competition for talent acquisition
  • Impact on business from alternative technologies
  • Risk from sudden changes in market needs
  • Risk of patent disputes or technology leaks

Innovations

2023: Development of High-Efficiency Image Transfer LSI

Overview
Developed low-power, high-efficiency LSI compatible with next-generation video transmission.
Impact
Expanded joint adoption with video equipment manufacturers

2023: Enhancement of Energy-Efficient LSI Design Technology

Overview
Introduced LSI design technology reducing power consumption by up to 20%.
Impact
Expansion of environmentally conscious products

2024: Start of Joint Development for AI Custom LSI

Overview
Launched joint development project for custom LSI targeted at AI processors.
Impact
Expectations for entry into next-generation markets

2022: Renewal of High-Density Mask ROM Technology

Overview
Improved manufacturing technology for high-capacity mask ROMs for game consoles.
Impact
Strengthened competitiveness of products for Nintendo

2021: Enhanced Environmental Resistance of In-Vehicle Sensor LSI

Overview
Developed in-vehicle sensor LSI compatible with high-temperature and vibration environments.
Impact
Expanded product adoption in automotive industry

2020: Addition of New Features to Security LSI

Overview
Developed security LSI with enhanced encryption processing capabilities.
Impact
Increased sales to IT companies

Sustainability

  • Reduction of environmental impact through energy-efficient LSI design
  • Waste reduction and recycling promotion programs
  • Establishment of green procurement system with suppliers
  • Ongoing promotion of in-house energy-saving activities
  • Strengthened compliance for environmental regulations
  • Employee environmental awareness training
  • Participation in local environmental conservation activities
  • Promotion of paperless operations
  • Setting and implementation of CO2 emission reduction targets
  • Sustainability assessments in supply chain