Q1 Results: AI Demand Kicks Into High Gear, Driving Record Profits
JX Advanced Metals (JX Metals) posted substantial revenue and profit gains for the first quarter of fiscal 2026 (April–June), fueled by surging demand from AI data centers and improving market conditions. Revenue rose 36% year-on-year to ¥260.6 billion (approximately $1.7 billion), while operating profit jumped 175% to ¥81.4 billion (approximately $515.6 million). Net profit attributable to owners of the parent climbed 181% to ¥53.1 billion (approximately $336.4 million). During the earnings call, the president stated, "Demand for each product in our focus businesses is surging, and supply-demand conditions are tightening," underscoring that the company is in a structural growth phase.
The profit increase was driven by multiple factors. While a one-time gain of ¥19.1 billion (approximately $121.0 million) from the partial sale of the Caserones mine stake contributed, business-related factors also played a major role: a weaker yen and higher copper prices added ¥26.5 billion (approximately $167.9 million), and increased sales in focus businesses, primarily AI data center-related, generated an additional ¥7.8 billion (approximately $49.4 million) in profit. This momentum was more than enough to absorb a ¥3.4 billion (approximately $21.5 million) volume decline caused by adverse weather at Chilean mines.
Quarterly Performance Highlights
Semiconductor Materials: Targets and Tantalum Powder Lead the Way
Operating profit in the semiconductor materials segment rose 69% year-on-year to ¥14.4 billion (approximately $91.2 million). Volume increases contributed ¥5.4 billion (approximately $34.2 million), while foreign exchange effects added ¥800 million (approximately $5.1 million). Thin-film materials, including semiconductor targets, grew significantly to ¥15.3 billion (approximately $96.9 million), up 82%, with target sales for advanced logic and memory chips used in AI servers posting a particularly strong 26% increase. Meanwhile, the tantalum and niobium business recorded a ¥1.1 billion (approximately $7.0 million) loss due to foreign exchange headwinds from a weaker yen against the euro, but sales volume of tantalum powder for capacitors nearly doubled, surging 89% year-on-year. The president explained, "Tantalum powder for AI servers is growing substantially, and supply-demand conditions are extremely tight." The company also revealed a policy of shifting its portfolio from general-purpose products to high-margin AI-oriented products, prioritizing profitability.
Information & Communications Materials: Copper Foil and Titanium Copper Capture Data Center Demand
Operating profit in information and communications materials rose 70% to ¥13.1 billion (approximately $83.0 million). In addition to a ¥2.4 billion (approximately $15.2 million) volume increase, a foreign exchange gain of ¥1.9 billion (approximately $12.0 million) also provided a tailwind. In functional materials, rolled copper foil volumes grew against a backdrop of rising power demand from AI data centers, and titanium copper recorded a substantial 42% volume increase for server and network equipment applications. The president expressed confidence, stating, "We are revising upward our full-year outlook for titanium copper."
Base Materials: One-Time Gain and Market Improvement Drive ¥56.8 Billion Segment Profit
Operating profit in the base materials segment surged 289% to ¥56.8 billion (approximately $359.8 million), accounting for 70% of total company profit. In addition to the ¥19.1 billion one-time gain from the partial sale of the Caserones stake, higher copper prices and a weaker yen generated a ¥23.8 billion (approximately $150.8 million) profit increase. Improved sulfuric acid margins in the metal recycling business also contributed. However, mine production cuts in Chile due to adverse weather resulted in a ¥3.2 billion (approximately $20.3 million) volume decline, making a recovery in the resources segment during the second half a key focus.
Full-Year Outlook: Significant Revisions to Currency and Copper Price Assumptions, ¥42 Billion Upward Revision
The company's official full-year guidance was raised from the figures announced in May, with revenue increased by ¥95 billion (approximately $601.8 million) and operating profit by ¥42 billion (approximately $266.0 million). The primary drivers were changes in currency assumptions (from ¥150 in May to ¥157 for the full year, ¥160 for July–September, and ¥155 from October onward) and an increase in the copper price assumption (from 520 to 586 cents), which together account for a ¥40.2 billion (approximately $254.6 million) profit increase. The effect of increased sales in focus businesses is expected to add another ¥5.5 billion (approximately $34.8 million), but volume declines due to adverse weather in Chile will be a ¥9.3 billion (approximately $58.9 million) drag. The president noted, "Copper prices are currently trading in the 640-cent range, so there is still upside potential in our assumptions," hinting at the possibility of further upward revisions.
Strategic Investment: InP Substrate Capacity to Expand 7–10x, Total Investment Reaches ¥135 Billion
The most closely watched element of this earnings call was the aggressive capital expenditure plan betting on sustained AI data center demand. At its core is the expansion of indium phosphide (InP) substrate production capacity. The company decided on an investment of up to ¥120 billion (approximately $760.1 million) to boost capacity by 7 to 10 times compared to fiscal 2025 levels. Semiconductor target production capacity will also be expanded — 1.3x at the Hitachinaka plant, 1.4x in Taiwan, and 2x in South Korea — alongside capacity increase investments for magnetic material targets and tantalum powder. As a result, total investment and lending for fiscal 2026 was raised from the initial plan of ¥114 billion (approximately $722.1 million) to ¥135 billion (approximately $855.2 million).
Furthermore, synergies with wholly owned subsidiaries Toho Titanium and Tatsuta Electric Wire are rapidly materializing. Toho Titanium is ramping up production of ultra-fine nickel powder for MLCCs, while Tatsuta Electric Wire's water leak sensors for AI servers are described by the president as having "high profit margins, and we expect significant profit contributions."
Tension and Confidence Emerge in Q&A
During the earnings call, a question was raised regarding the deceleration in tantalum powder volume growth. The president responded, "We are implementing price increases while redirecting capacity toward AI server applications, where we expect high profitability. This represents a portfolio shift that prioritizes earnings over volume." He emphasized that this is a strategic choice. Regarding mine production cuts, the company indicated that Caserones is expected to resume operations in mid-August, pinning hopes on a recovery in the second half.
The steady improvement in the profitability of focus businesses was also highlighted throughout the earnings call. The president concluded, "Not only consolidated operating profit but also the profit margins of our focus businesses are growing. By expanding capital investment and advancing price revisions, we will further accelerate growth," revealing confidence as a materials major in the AI era.
