Japan electronic materials, fine chemicals, paint

Research evidence excerpt

Japan electronic materials, fine chemicals, paint

Nomura | Japan electronic materials, fine chemicals, paint 22 July 2026

Display materials: Weak demand for materials for smaller displays, we do not

envision any major surprises in earnings

Rising memory prices and CPU shortages have had a major impact, and smartphone

producers have recently been cutting their shipment volume targets and hiking prices for

notebook PCs and tablets. Aside from forex factors, we find it hard to envision strong

earnings from display materials at companies such as Nitto Denko [6988] (Neutral).

Fine chemicals (1): Potential progress at Denka with negotiations about

withdrawing from US chloroprene rubber business

On 2 July, Denka [4061] (Buy) and the US Environmental Protection Agency (EPA)

reached a settlement including penalties of around $1mn. We think this settlement sets a

benchmark that will make it easier to negotiate and discuss the remaining issues. We

intend to find out more from management at the briefing. The plaintiffs in the lawsuit

against Denka said that they were satisfied with the settlement, given the plant has now

shut down. Elsewhere, we estimate high profits at Zeon's [4205] (Neutral) elastomer

segment in Apr–Jun. We expect some benefits from battery materials in Apr–Jun on

progress with shipments to the US for energy storage system applications in 27/3. We

see scope for margin improvement in the US, where competition with Chinese

manufacturers looks to have been relatively limited.

Fine chemicals (2): We forecast price hikes for ink, strong performance in

semiconductor materials and MLCC materials

DIC [4631] (Buy) has announced price hikes in excess of increases in the cost of ink

inputs (at least 30% for gravure inks). We expect ink spreads to come in flat q-q in Apr–