[Summary]
EDP (7794) was bought to the high stop level of 1,394 yen on May 28, 2026. The impetus was the successful development of a mosaic crystal for producing 2-inch wafers, as well as the announcement of a medium-term business plan and funding through third-party allocation of capital and stock acquisition rights.
This is not a ``stock that was bought due to good financial results''. In the most recent fiscal year ending March 2026, sales were 516 million yen, operating loss was 1.36 billion yen, and net loss was 2.415 billion yen. Operating cash flow was 968 million yen, which is quite poor in terms of performance alone.
However, the reason it was bought was because of the simultaneous improvement in technological expectations and cash flow.
The market is starting to see EDP not just as a loss-making small-cap stock, but as a next-generation semiconductor theme stock with the potential to move closer to mass production of diamond semiconductors. However, the current stock price is difficult to explain in terms of profits. This is a situation that should be looked at, including the speed at which supply and demand collapses.
First, the conclusion
The essence of this stop high is that the following three things occurred at the same time.
| Factors | Market reception |
|---|---|
| 2-inch mosaic crystal | One step closer to industrialization of diamond semiconductors |
| Funding | Concerns about funding to continue development have eased |
| Ultra-small growth supply and demand | Buying tends to be concentrated when materials become available |
The important thing here is that sales did not suddenly increase.
What is being bought is not the current profit, but the future option of ``a huge market if mass production is possible.'' That's why it's strong. But it's dangerous for the same reason.
Should we move on from technology news to order news? This is the difference between authenticity and authenticity.
What happened
EDP announced on May 27, 2026 that it has successfully developed a mosaic crystal for 2-inch wafer fabrication.
According to the company, the developed mosaic crystal measures 53 x 53 x 1.2 mm and is made by connecting four single crystals of 25 x 25 mm or more. Surface polishing confirmed Ra of approximately 5 nm, and the company explains that it can be used as a parent crystal.
At the same time, the market reacted not simply because a large crystal had formed.
The question when it comes to semiconductor materials is not whether they can be made, but whether they can be made stably and in large quantities. Large diameter, uniformity, yield. These three are the core of mass production.
EDP explained that it will first manufacture a large number of parent crystals, and that it may be ready for mass production in the second half of this year. The market reacted to this.
Illustration: Trends seen in the current market price
Why is 2 inches important?
Diamond semiconductors are very attractive when looking only at their theoretical properties.
High voltage resistance, high heat dissipation, low loss, and high speed operation. In the context of power semiconductors and high-power devices, it is often talked about as a material candidate beyond SiC and GaN.
However, there is a difference between being excellent as a material and being viable as an industry.
In semiconductors, a business only becomes viable when equipment, processes, yields, customer evaluation processes, and quality stability are all in place. EDP itself explains that it takes a very long time to polish a 2-inch area, approximately 10 times as long as a 1-inch area.
In other words, this material is not a declaration of victory in mass production as a finished product.
This is a material that has moved from a laboratory technology to a candidate for industrialization. If you make a mistake here, you will misinterpret stock prices.
Meaning of funding
This time, funding is as important as technical materials.
On May 27, EDP also announced the issuance of new shares through third-party allotment and the 18th stock acquisition rights with provisions for exercise price revision. According to market reports, 483,000 new shares will be issued, with a potential number of stock acquisition rights of 3 million shares and a maximum dilution rate of 22.51%. The company plans to use the proceeds to invest in development, increase production of lab-grown diamond rough, and establish a jewelry sales system.
Normally, capital increases would be frowned upon due to the risk of dilution.
However, this time, some believe that the company, which is in the red and has large cash outflows, has found the funds to continue development. This is a little different from the usual capital increase market.
Looking at the latest financial results, for the fiscal year ending March 2026, sales were 516 million yen, operating loss was 1.36 billion yen, and net loss was 2.415 billion yen. Operating cash flow was an expense of 968 million yen, and cash and cash equivalents at the end of the period were 825 million yen.
Funding is needed to continue large-scale development in this state.
Despite seeing the dilution, the market interpreted this as ``anxiety about development funds has temporarily receded.'' That's why it was bought. It's quite speculative, but I understand the logic of the market.
Danger as a supply and demand market
EDP is in a situation where it is difficult to explain the stock price with profits.
According to Minkabu's data as of 10:14 on May 28, the stock price was 1,394 yen, an increase of 300 yen from the previous day, an increase rate of 27.42%. With the stop high displayed, trading volume had ballooned to 2,312,500 shares.
This is no longer a normal evaluation of financial results, but a market of supply and demand for theme stocks.
In the short term, supply and demand are more important than the quality of the materials.
| Short-term check | View |
|---|---|
| Stop high | Is there still buying demand |
| Hidden line after a sudden increase in trading volume | This can easily be a sell-off sign for short-term funds |
| Long beard | May indicate strength in material digestion and profit making |
| Maintain around 1,394 yen | Market conscious of high intraday stop level |
| Exercise of stock acquisition rights | Selling pressure is likely to occur at higher prices |
Especially for theme stocks related to capital increases, rising stock prices and raising funds are two sides of the same coin. While this will provide development funds for the company, it will leave existing shareholders with dilution and future selling pressure.
I want to look at this in a very calm manner.
What you really need to see in the midterm
For EDP to truly be reevaluated, we need to move on to the next stage.
| Stage | Key points for the market |
|---|---|
| Technology announcement | 2-inch mosaic crystal, 4-inch development roadmap |
| Demonstration | Evaluation and joint research with customers and research institutions |
| Mass production | Polishing time, yield, quality stability |
| Customer recruitment | Contracts with semiconductor manufacturers, research institutes, and device development companies |
| Sales | Will it change to continuous sales rather than prototypes |
If it's just technology news, I'll end up with theme stocks.
If you move on to order news, customer evaluations, mass production lines, and sales recording, your perspective will change. This is what investors really want to check.
Risk
There are many risks. In fact, if I don't write about this, my analysis of EDP will be a complete failure.
| Risk | View |
|---|---|
| Mass production risk | Completion of 2-inch crystals and stable mass production and yield improvement are two different issues |
| Polishing time | Approximately 10 times longer than 1-inch polishing time, requiring equipment development and process improvement |
| Customer recruitment risk | Semiconductor manufacturer evaluation and mass production contract are still in the confirmation stage |
| Continuing to be in the red | There will be a large deficit in the fiscal year ending March 2026, and there is a long way to go to make the business profitable |
| Dilution | There is a maximum dilution risk of 22.51% with new shares and stock acquisition rights |
| Collapse of supply and demand | Small-sized theme stocks have a rapid decline after the peak of trading volume |
In particular, exercising stock acquisition rights after a capital increase will have an effect on medium-term supply and demand. Even if stock prices are strong in the short term, it is easy to feel selling pressure at the top when exercise progresses.
Investment stance
In the short term, this is a completely thematic stock market.
If you continue to stick with it, it will be easy to collect funds. On the other hand, if you go for a big sale and draw a long beard or a dark line, it is easy to withdraw short-term funds all at once.
From a medium- to long-term perspective, the focus is quite clear.
- Will a system for mass production of 2-inch wafers actually be established?
- Can mass production issues such as polishing time and yield be improved?
- Should we proceed to customer evaluation, joint research, and mass production contract?
- Will there be enough material to absorb the dilution due to the exercise of stock acquisition rights?
- Will you be able to make progress toward the March 2027 plan of sales of 1.1 billion yen and operating loss of 283 million yen?
The market is beginning to reconsider EDP from a ``small loss-making stock'' to a ``next-generation semiconductor theme stock.''
However, for now, expectations are still the key. We are not yet at the stage where we can back this up with profits.
Summary
The stop high of EDP (7794) was caused not only by the technological material of 2-inch mosaic crystals, but also by the combination of securing development funds and small-cap stock supply and demand.
What the market is buying is not current performance.
This is a future option in which diamond semiconductors may become a material for mass production. Therefore, there is a price range.
From here on out, we should move on from technology news to order news. Semiconductor manufacturer evaluation, verification, mass production, customer contracts, and sales. I would like to check them in this order.
Supply and demand in the short term, dilution in the medium term, and mass production in the long term. EDP is an interesting, but rather sharp stock.
Source
This article is based on publicly available information, company announcements, and supplemental market data.
- [EDP "Notice of development of mosaic crystal for 2-inch wafer production" May 27, 2026] (https://prtimes.jp/main/html/rd/p/000000019.000126928.html)
- EDP official website
- [Minkabu "EDP (7794) Stock Price Information" Supplementary Market Data, as of 10:14 May 28, 2026] (https://minkabu.jp/stock/7794)
- EDP “Notice regarding issuance of new shares and 18th stock acquisition rights (with provisions for exercise price modification) through third-party allotment”, timely disclosure, May 27, 2026
- EDP “Summary of Financial Results for the Fiscal Year Ending March 2026 [Japanese Standards] (Consolidated)”, May 13, 2026