JX Advanced Metals (referred to as JX) has announced a further capital investment at its Isohara Plant to significantly boost the production capacity of Indium Phosphide substrates. These substrates are a critical material for manufacturing light-emitting and light-receiving elements used in high-speed optical communication. This decision follows a previous investment made in July 2025 and aims to increase the company's Indium Phosphide substrate production capacity by approximately one point five times (1.5x) compared to the 2025 level, with the expansion expected to be operational by the end of fiscal year 2027. This move reinforces JX's position as one of the few global suppliers of this specialized material.
The primary driver for this substantial capacity expansion is the explosive growth in data transmission volumes, especially within hyperscale data centers globally. The rapid advancement of technologies like generative Artificial Intelligence (AI) has led to an unprecedented increase in data traffic, accelerating the industry's shift from conventional electrical interconnects to high-speed optical communication systems. Indium Phosphide is preferred over materials like Silicon (Si) or Gallium Arsenide (GaAs) in many optical communication applications due to its superior electron velocity and direct bandgap, which allows it to efficiently emit and detect light at the necessary wavelengths (typically 1300 to 1550 nanometers) for fiber optics.
Market analysis indicates that the global Indium Phosphide wafer market is experiencing robust growth, driven primarily by the telecommunications and datacom sectors. The compound annual growth rate (CAGR) for the Indium Phosphide wafer market is forecasted to be around eleven point five percent (11.5%) to thirteen point five percent (13.5%) through 2030, with optical transceivers being the largest application segment. JX's strategic investment is a direct response to this sustained market demand, anticipating the continued need for high-performance, low-power components for next-generation technologies, including the emerging Photonic-Electronic Convergence technology, which promises to revolutionize data processing and significantly reduce energy consumption.
This investment will solidify the supply chain for high-speed optical devices, which are indispensable for future data infrastructure. The expansion at the Isohara Plant ensures that JX can meet the escalating requirements of its international clientele, supporting the global transition to faster and more energy-efficient data networks essential for the age of AI and cloud computing. JX continues to evaluate the market and is considering further flexible investments to keep pace with the evolving demand for advanced semiconductor materials.
