Thom Hogan

As part of their year-end financial wrap ups, Nikon has now published a new mid-range plan. In launching the new plan Nikon was brutal about how they did on their previous mid-range plan (2022-2025): they “exceeded plan” for two years but “substantially underperformed” for the last two years. Further: “Insufficient strengthening of competitiveness failed to deliver stable and expanding profitability."

That’s pretty evident from this graph:

Factors that impacted the Imaging group during that previous plan were strength in mirrorless cameras, the camera market expansion, plus a weak yen. But in the last year tariffs and soaring parts costs have cut into the group’s profits. However, let’s be clear: during the past mid-range plan Imaging was the only group within Nikon that showed a profit; all other groups show cumulative losses during the 2022-2025 period.

So what’s the new plan moving forward? Short answer: 25% revenue growth in Imaging by 2030. Longer answer: Nikon wants to use cash generated by the Imaging, Healthcare, and Industry groups to generate growth in Precision and Digital Manufacturing. The extra cash in Imaging will come from younger and upgrading users, plus cinema cameras and lenses. 

However, the following graph shows something interesting:

Essentially, Nikon is betting on a comeback in the Precision Equipment (semiconductor manufacturing) division. And not just a comeback, but substantive growth driving the overall company. The old tension of Imaging, then Precision, then Imaging, then Precision leading the company is back in spades. (I’d disagree with the above slide’s sneaky contention that Precision is in the “stable profit generation” realm; Nikon quietly labeled that with a future 2028 value, while the rest of the chart uses current, FY30, and FY35 numbers for their plots.)

As usual with public plans, there’s not a lot of detail, though a few things sneak through. Precision seems to think that they’ll be more competitive with immersion ArF lithography, while Imaging will have 80 Z-mount lenses by 2030 and be emphasizing updating current gear as well as expanding the cinema camera lineup. Meanwhile, new major corporate acquisitions are “on pause."

One problem I see is Nikon is counting on a resurrection of Precision at a time when bans of sales to China now has that country developing their own steppers and lithography systems. On the other hand, we’re talking about an area where delivering even 2 or 3 additional ArF units a year would have significant impact on revenue (Nikon forecasts 1 additional unit in the fiscal year just started).

Imaging in 2027 is forecast to increase revenue by about 3% while selling 10,000 fewer cameras (and the same amount of lenses). This seems to align with a Z9II and perhaps another higher end camera (cinema?) being introduced sometime this fiscal year (year ends March 31, 2027).