Morgan Stanley on SUMCO (3436.T): Reclassification of Taiwan Wafer Subsidiary as an Equity-Method Affiliate
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Morgan Stanley MUFG published an event update on SUMCO (3436.T) on August 27, 2026. At 3:30 p.m. that day, SUMCO announced the sale of part of its stake in Formosa SUMCO Technology (FST), its Taiwan wafer joint venture with the Formosa Plastics Group. The sale, completed on August 20, reduced SUMCO's voting interest in FST from 43.2% to 38.0%, reclassifying FST from consolidated subsidiary to equity-method affiliate; accounting uses the deemed-date convention, with September 30 (the third quarter-end of the F12/26 fiscal year) treated as the deemed reclassification date. The divestment intention had been flagged as early as February 19, 2026. FST's 2025 results were modest—sales just below ¥60bn, operating profit just below ¥5bn, net profit around ¥3bn—and its 1H26 operating and net profit were essentially zero. With Morgan Stanley's forecasts still consolidating FST, the sale should have a negligible effect on SUMCO's net profit and little impact on the share price; the overall impression is neutral. Morgan Stanley maintains Underweight (effective June 9, 2026, reflecting expectations having run ahead of fundamentals); the stock closed at ¥3,434 on August 27. No new target price or earnings-estimate changes accompanied this event note.