26 January 2026 | 6:58AM JST Equity Research Japan Chemicals: Specialty: Asia investor visit feedback: High interest in gen-AI related stocks, including back-end/CCL From January 21-23, we visited Asia (Hong Kong) and had the opportunity to meet with about 30 investors over three days. We summarize the key takeaways within. Overall, we note that interest was concentrated on generative AI-related materials, and our impression was that investor views were more positive compared with our last visit. There was ...

Summary of Conference Call Notes Industry Overview - **Industry**: Specialty Chemicals and Semiconductor Materials - **Key Focus**: Copper Clad Laminate (CCL) for AI servers, semiconductor package substrates, and advanced copper foil products Company Insights Mitsui Kinzoku - **Market Position**: Dominant in advanced copper foil products with a 98% global market share in MicroThin™ and 60% in VSP™ for AI servers [12][105] - **Growth Forecast**: Expected top-line growth for VSP™ at a CAGR of +80% from FY3/25 to FY3/28, driven by volume growth, improved product mix, and price hikes [13][103] - **Operating Profit Growth**: Forecasted CAGR of +43% for the copper foil business, contributing to overall company operating profit growth of +25% [14][16] - **Valuation**: Stock rated as Buy with a P/E of 14x on FY3/27 estimates, indicating strong undervaluation [16] Nittobo - **Market Share**: Holds approximately 90% global market share in low thermal expansion glass cloth for semiconductor package substrates [3] - **Profit Growth**: Forecasted overall company operating profit growth at a CAGR of +22% from FY3/25 to FY3/28 [3] - **Valuation**: Rated Neutral due to P/E of 18x on FY3/27 estimates, which reflects expected profit growth [3] Resonac - **Market Position**: Largest manufacturer of back-end semiconductor materials, covering 60%-70% of back-end materials [4] - **Profit Growth**: Expected core operating profit growth at a CAGR of +27% from FY12/24 to FY12/27, with overall company core operating profit growth of +21% [9] - **Valuation**: Stock rated as Buy, with potential for eliminating conglomerate discount through restructuring [9] Key Market Trends - **CCL Market Growth**: Anticipated to grow at a CAGR of +179% from 2025 to 2027, driven by advancements in AI server technology [1] - **Demand Drivers**: Significant demand for high-end AI servers, with expectations for GPU and ASIC servers to grow by +118% and +168% respectively in 2026 [80] - **Technological Advancements**: Introduction of multilayer PCBs with 30+ layers and M9+ CCL expected to expand significantly by 2027 [13][81] Financial Projections - **Mitsui Kinzoku**: - FY3/26 operating profits estimated at ¥87.3 billion (+17% YoY) [29] - FY3/27 operating profits projected at ¥114.6 billion (+31% YoY) [30] - **Nittobo**: Operating profit growth forecasted at +22% CAGR from FY3/25 to FY3/28 [3] - **Resonac**: Core operating profit growth expected at +27% CAGR from FY12/24 to FY12/27 [9] Additional Insights - **Technological Edge**: Mitsui Kinzoku's VSP™ series achieves a high level of surface smoothness, crucial for high-frequency applications, making it a key material for next-generation communication infrastructure [51][53] - **Production Capacity Expansion**: Mitsui Kinzoku plans to increase VSP™ production capacity to 1,200 tons/month by September 2028 to meet rising demand [92] - **Market Dynamics**: Competitors are exploring alternative sources to mitigate dependence on Mitsui Kinzoku, but the company maintains a strong competitive edge due to its technological capabilities and established market presence [73][74] This summary encapsulates the key points from the conference call, highlighting the competitive landscape, growth forecasts, and financial projections for the companies involved in the specialty chemicals and semiconductor materials industry.