TDK (6762.T): Components strategy briefing and plant tour highlight corporate culture, competitive edge, and growth potential for AI; Buy

We toured three TDK sites on September 11: the Honjo Plant (MLCCs), the Sakata Plant (wire-wound common mode filters), and the Tsuruoka East Plant (thin-film inductors). We also attended a business strategy briefing by the CEO of the Electronic Components Business Company. We think the "TDK United" corporate culture has penetrated through to the manufacturing floor, as seen in vertically integrated end-to-end production, horizontal deployment of know-how, and initiatives to combine capacities in materials and core technologies with products and sales channels. We think these initiatives are underpinning unique competitiveness, enabling TDK to provide value to a broad range of areas in the AI ecosystem, and leading to improved growth potential and profitability across many product groups. Our impression from the tour is positive. Based on this briefing, assuming production capacity (volume basis) in FY3/26 at 100, TDK intends to expand capacity over FY3/27-FY3/29 as follows: for MLCCs,