The JX Advanced Metals Group pursues the development of niche top in line with next-generation trends, leveraging a robust R&D structure and elemental technologies cultivated over more than 100 years since our founding. We also endeavor to identify new market needs based on strong relationships with customers.

Schematic Diagram of Sputtering Target Adoption (Cross-Sectional View of Logic Semiconductor)

(1) Sputtering Target for Semiconductors

This material is used to form fine wiring within semiconductor devices such as logic and memory devices. We offer a wide variety of sputtering targets, including copper, tantalum, titanium, tungsten, and cobalt, all of which hold the world's No.1^* market share.
Semiconductors are becoming increasingly advanced every year, and consequently, there is a demand for high-quality sputtering targets that can form finer wiring. We have established strong relationships built on trust with semiconductor manufacturers and semiconductor equipment manufacturers through the stable supply of high-quality products, and further growth in the scale of our business is anticipated in the future.

• *We prepared this information based on a survey conducted by an external research organization at our request (2021 results based on the sales value of the Company's share of the semiconductor target market).

Point 1

Strong Relationships With Semiconductor and Semiconductor Equipment Manufacturers

Point 2

Superior Technology Used to Manufacture Sputtering Targets for Semiconductors

Example of the Adoption of Rolled Annealed Copper Foil

(2) Treated Rolled Copper Foil for FPC

Treated rolled copper foil is used in flexible printed circuit boards (FPC). This copper foil is a wiring material that can be bent to connect components inside smartphones, contributing to miniaturization and longer life. In the future, in addition to the further advancement and miniaturization of components for smartphones and PCs with the incorporation of AI, the use of these components is expected to expand through peripheral devices such as smartwatches and smart glasses. We have secured our position as a leading vendor, maintaining a competitive advantage through a market development approach that allows us to launch products ahead of competitors by identifying development needs quickly based on strong relationships with end users.

• *Source: 2023 Handbook of New Materials for Electronics Implementation, Fuji Chimera Research Institute (2022 results; FPC only; based on shipping volume)

Point 1

The Superior Bending Resistance of Our Treated Rolled Copper Foil

1. *1Standard test method for FPC bending resistance in accordance with the standards set by IPC Association Connecting Electronics Industries (a printed circuit industry organization in the U.S.) and JIS standards.
2. *2Electrodeposited copper foil that corresponds to Grade 10 Electro-deposited low temperature annealable of the IPC standard IPC-4562A, Metal Foil for Printed Board Applications, which is the most widely used standard in the printed circuit industry globally.

Point 2

Market Development Approach for Early Identification of Development Needs

The crystal materials sector is expected to grow due to the rapid proliferation of generative AI, which has led to an increase in the number of data centers, rising mobile communication volumes, and advancements in sensing technology. By leveraging our high-purification, compositional control, and temperature control technologies to supply the market with high-quality crystal materials, we are working to make crystal materials the pillar of the Group's next-generation earnings. As part of this initiative, we established the Crystal Material Business Promotion Office under the Technology Group in April 2024. This department is focused on strengthening our capabilities in areas such as InP (Indium Phosphide) wafers used in light-emitting and receiving devices for data centers, as well as CdZnTe (Cadmium Zinc Telluride) wafers used in applications like infrared detectors and radiation detectors.

With the rapid spread of generative AI, the demand for data computation is expected to increase dramatically. In the semiconductor industry, attention is focused on technological innovations in cutting-edge areas such as Graphic Processing Units (GPUs) and High Bandwidth Memory (HBM), which support AI data centers. Given our advanced technological capabilities in handling a variety of metal materials, we believe there are new business opportunities available to us in this area. As a leading player in the sputtering targets for semiconductors, we have deepened our partnerships with semiconductor manufacturers. Moving forward, we will leverage the network we have developed over years of doing business to expand our lineup in the advanced materials sector.

Initiative 1

Capturing New Thin Film Deposition Opportunities

As semiconductor miniaturization and multilayering advances, we anticipate an increasing demand for thin film formation using methods such as Chemical Vapor Deposition (CVD) and Atomic Layer Deposition (ALD), in addition to Physical Vapor Deposition (PVD). We are working toward the early commercialization of materials used in these applications under the CVD/ALD Materials Business Promotion Office, part of the Advanced Technol-ogy & Strategy Department, Technology Group established in February 2024.

Initiative 2

Packaging and Assembly

Discussions about the limitations of enhancing semiconductor performance as an extension of conventional technologies continue. As a result, there is growing attention on post-processing innovations such as chiplets, which significantly increase processing speed through high-density integration of multiple chips with different functions -such as CPUs and memory- on a single substrate. Demand for our sputtering targets is expected to grow as a material for wiring that connects chiplets both vertically and horizontally. The need for new materials, such as high-purity plating materials, is also expected to expand for these applications. Furthermore, an increase in demand for our materials is also anticipated in applications such as materials for mounting semiconductors onto circuit boards.

In anticipation of future growth in demand for semiconductor and ICT materials, we are actively expanding production capacity for advanced materials in Japan and overseas, with Ibaraki Prefecture being the center of this expansion.

We have acquired a large site in Hitachinaka City, Ibaraki Prefecture, and are constructing a new plant.
The new plant will be responsible for the production of semiconductor materials, mainly sputtering targets for semiconductors, in anticipation of a significant increase in future demand. Ultimately, it is projected to become one of our core facilities, employing over 500 people.

Location	Shinko-Cho, Hitachinaka City, Ibaraki Prefecture
Area	Approx. 240,000 m2
Products	Semiconductor materials, etc., with a focus on sputtering targets for semiconductors
Operation Launch	FY2025 (projected)

In our new plant located in Arizona, an area of growing concentration in the semiconductor industry, we will flexibly expand production capacity for semiconductor sputtering targets in response to customer requirements. Additionally, we plan to utilize this facility as a base for new business development, establishing it as a hub for advanced business sectors in North America.

Location	Mesa, Arizona, the U.S.
Area	Approx. 260,000 m2
Products	Semiconductor materials, etc., with a focus on sputtering targets for semiconductors
Operation Launch	FY2024

To enhance production capacity for semiconductor sputtering targets and treated rolled copper foil, we are constructing two new plants in Hitachi City, Ibaraki Prefecture.

Location	Shirogane-Cho, Hitachi City, Ibaraki Prefecture
Area	8,001.77 m2
Products	Treated Rolled Copper Foil
Operation Launch	FY2024

Location	Sunazawa-Cho, Hitachi City, Ibaraki Prefecture
Area	23,348.04 m2
Products	Sputtering targets for semiconductors
Operation Launch	FY2024 (plan)