We propose a neutron diffractometer system based on MgB2 thin film detectors and an SFQ signal processor. Small dimensions of MgB2 thin film detectors and high processing capability of the single flux quantum (SFQ) circuits enable us to handle several thousand or more detectors in a cryocooler, leading to a very compact system. In addition, the system can provide many diffraction patterns for different kinetic energies simultaneously. Kinetic energy is determined for individual neutrons by means of the time-of-flight method by using SFQ time-to-digital converters (TDCs). Digital outputs of the TDCs are multiplexed in time domain and sent to room-temperature electronics with reduced number of cables. A dual-input SFQ signal processor including TDCs and a multiplexer has been successfully demonstrated with a time resolution of 20 ns and power consumption of 400 µW. These values show high feasibility of the neutron diffraction system proposed here.