Semiconductor Materials Maker JX Advanced Metals Soar In Japan’s Biggest IPO Since 2018

JX Advanced Metals Makes a Strong Debut on the Tokyo Stock Exchange

JX Advanced Metals, a leading Japanese supplier of semiconductor materials to major foundries like TSMC and Intel, made a stellar debut on the Tokyo Stock Exchange on Wednesday. The company’s shares surged 6.6% on its first day of trading, giving it a market capitalization of ¥811 billion ($5.4 billion). The initial public offering (IPO) was priced at the top of its range, with shares selling for ¥820 ($5.54) each. This successful listing marks one of the largest IPOs in Japan since 2018, when SoftBank Corp., owned by billionaire Masayoshi Son, raised $23.5 billion in its own public offering.

JX Advanced Metals was spun off from Eneos Holdings, Japan’s largest oil refiner by capacity. Eneos raised ¥438.6 billion ($2.96 billion) by selling a 57.6% stake in the company, while retaining a 42.4% stake. The IPO did not involve the issuance of new shares, with the funds raised coming solely from the sale of existing shares. This move highlights Eneos’ strategic decision to unlock value from its subsidiary while maintaining a significant stake in its future growth.

A Leader in Advanced Materials

JX Advanced Metals is a key player in the global semiconductor supply chain, specializing in materials critical to the production of semiconductors and ICT (Information and Communications Technology) equipment. The company operates across the entire value chain, from metal smelting to the production of advanced materials. Its product portfolio includes sputtering targets, which are used to create thin films on semiconductors for conductivity, and rolled copper foil, a key component in flexible printed circuits for electronic devices.

The company’s dominance in these areas is evident from its market share. JX Advanced Metals commands approximately 60% of the global market for sputtering targets and an impressive 80% of the world’s rolled copper foil market. These materials are essential for the production of high-performance semiconductors and flexible electronics, making JX Advanced Metals a critical supplier to the global tech industry.

Financial Performance and Strategic Shifts

In the nine months ended December, JX Advanced Metals reported a 54% year-on-year decline in revenue to ¥516.9 billion ($3.48 billion). However, its net profit rose 10% to ¥46 billion ($310 million) during the same period. The revenue drop was attributed to the divestment of several copper-related businesses, as the company shifts its focus toward advanced materials. This strategic realignment reflects JX Advanced Metals’ efforts to position itself for long-term growth in the semiconductor and ICT sectors.

During the same period, the company generated 43% of its sales from metal smelting, 36% from ICT equipment materials, and the remaining 21% from semiconductor materials. Notably, its ICT equipment materials business saw a 34% year-on-year increase in sales, while its semiconductor materials segment grew by 23.5%. These gains were driven by rising demand for high-performance chips, fueled by the global AI boom and increased smartphone sales.

Eneos’ Commitment to Green Energy

Eneos Holdings, the parent company of JX Advanced Metals, has announced plans to use a portion of the proceeds from the IPO to expand its portfolio of greener energy sources. This includes investments in synthetic fuels and hydrogen production, aligning with global efforts to reduce carbon emissions and transition to cleaner energy. By spinning off JX Advanced Metals, Eneos aims to create a more agile and focused entity that can capitalize on the growing demand for advanced materials in the tech sector.

The listing of JX Advanced Metals is also expected to enable the company to accelerate its investments in cutting-edge technologies, including materials for semiconductors and ICT applications. This move underscores the strategic importance of JX Advanced Metals in the global semiconductor supply chain and its potential to play a key role in shaping the future of the tech industry.

Riding the AI-Driven Semiconductor Boom

JX Advanced Metals is not the only Japanese company benefiting from the surge in demand for semiconductors. The global AI boom has created a wave of interest in high-performance chips, driving growth across the semiconductor supply chain. In recent months, several Japanese companies in the sector have gone public, capitalizing on this trend. For instance, Rigaku, a semiconductor testing equipment maker backed by Carlyle, raised $750 million in its IPO last October. Similarly, Kioxia, a memory chip maker supported by Bain Capital, secured $800 million in its December IPO.

These listings highlight the growing importance of Japan’s semiconductor industry in the global tech ecosystem. As demand for advanced chips continues to rise, companies like JX Advanced Metals are well-positioned to benefit from their expertise in critical materials and technologies. The company’s strong market position, combined with its strategic focus on innovation, makes it a key player in the semiconductor supply chain.

In conclusion, JX Advanced Metals’ successful IPO and strong debut on the Tokyo Stock Exchange reflect its strategic importance in the global tech industry. With its leadership in advanced materials, strong financial performance, and alignment with broader industry trends, the company is poised for continued growth in the years to come.