Japan Chemicals: Implications from results at 30 overseas companies

Research evidence excerpt

Japan Chemicals: Implications from results at 30 overseas companies

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02 Aug 2026 21:50:11 ET │ 14 pages

Japan Chemicals

Implications from results at 30 overseas companies

CITI'S TAKE

Yuta Nishiyama AC

We believe an understanding of trends in downstream industries is important for +81-3-6776-4643

considering demand trends in the upstream chemicals industry. We provide an yuta.nishiyama@citi.com

overview by sector of 30 overseas companies that have reported results through July

31. CSP capex remains extremely strong, with positive implications for related

markets such as semiconductors (both front-end and back-end), optical networks,

and HDDs. We highlight in particular the explosive growth of InP substrates. This is

positive for JX Advanced Metals, whose share price has recently undergone a

correction. Outside the tech sector, we highlight the paint industry, where

companies are steadily passing on costs and the India market remains robust.

Alongside lagging tech-related stocks like JX Advanced Metals, we favor the paint

subsector.

Semiconductors (front-end) — Semiconductor demand is extremely strong, and

companies expect strong demand to continue for several years. We see positive

implications for semiconductor material companies.

Semiconductors (back-end) — Demand for semiconductor back-end processing

continues to be extremely strong, with positive implications for Nittobo and

Mitsubishi Gas Chemical. That Unimicron is shifting production capacity from BT

substrates to ABF substrates is a point to watch for Mitsubishi Gas Chemical, but

we believe the impact will basically be minor, as total demand for BT substrates will

not change.

Optical networks — Demand for InP substrates is growing explosively, with supply

nowhere near to keeping pace.