JX Advanced Metals (5016.T): InP substrate capacity expansion announced – set to become longer-term earnings driver

Research evidence excerpt

JX Advanced Metals (5016.T): InP substrate capacity expansion announced – set to become longer-term earnings driver

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16 Jun 2026 03:32:08 ET │ 10 pages

JX Advanced Metals (5016.T)

InP substrate capacity expansion announced – set to become longer-

term earnings driver

CITI’S TAKE Buy

As previously flagged, the Nikkei reported on June 15 that JXAM would Price (16 Jun 26 15:30) ¥4,466.0

expand its InP substrate capacity, and on the morning of June 16 the firm Target price ¥5,100.0

issued a press release regarding this matter. The announcement is largely

Expected share price return 14.2% in line with the report. Given the large scale of the investment, we would

also expect additional price increases. The company plans to expand Expected dividend yield 0.4%

production capacity by 7x-10x, but even this may not be enough to keep Expected total return 14.6%

pace with demand, so we think a further capacity expansion may be Market Cap ¥4,246,478M

needed. We expect InP substrates, along with semiconductor target US$26,673M

materials, to become longer-term earnings drivers for JXAM.

• Details — Amid rapid growth in demand for optical transceiver applications,

Yuta NishiyamaAC JXAM will increase production capacity by 7x-10x by FY3/31 (this includes three

previously announced expansions). We expect a gradual ramp-up starting in +81-3-6776-4643

FY3/27 H2. The capex involved will be up to ¥120bn, separate from the c¥25bn yuta.nishiyama@citi.com

investment in the three previously announced expansions (for a total of

c¥145bn). The three previously announced expansions were slated to triple total

production capacity, but the firm said this would be “completely insufficient.”

The company now plans to expand capacity by up to 10x, though we understand