Nissan Chemical is establishing a new wholly owned subsidiary in China with a registered capital of approximately 5 billion yen (210 million yuan). This move aims to strengthen its local supply base for semiconductors and secure long-term earnings growth.
Nissan Chemical has established a wholly owned subsidiary named Nissan Chemical Materials (Zhangjiagang) Co., Ltd. in Zhangjiagang City, Jiangsu Province of the People's Republic of China. The registered capital is set at 210 million yuan (approximately 5 billion yen), classifying it as a designated subsidiary. The new company will focus on the manufacturing and sales of semiconductor materials, specifically photoresist anti-reflective coatings (BARC) and multilayer materials. The establishment date is September 1, 2026, with Takakazu Nakata appointed as representative. The first installment of capital totaling approximately 2.1 billion yen will be transferred on October 15, 2026. This active capital investment and localization in the Chinese market represent a strategic step essential for modern companies to harden their supply chains, clearly indicating a shift toward constructing a region-embedded supply network rather than merely building a factory.
The background of this establishment includes the expansion of semiconductor demand and the growing need for supply chain stability among customers. By significantly expanding local manufacturing and sales in China through the new subsidiary, Nissan Chemical aims to enhance its responsiveness to demand fluctuations that were previously handled from Japan or other bases. By building a supply system close to customers, the company aims to improve service quality and shorten delivery times, aiming to achieve sustainable growth in its semiconductor materials business. While the industry sees a trend toward local production for local consumption, Nissan Chemical seeks to differentiate itself from competitors by establishing a physical presence in China, one of the largest growing markets.
Regarding the impact on current performance, Nissan Chemical has judged that the effect on results for the fiscal year ending March 2027 will be minimal. This is attributed to the capital contribution schedule starting in October 2026 and the time lag before full-scale operations begin. After registration is completed, the company will proceed with equipment investment and personnel recruitment, gradually commencing production. While profitability requires a medium-to-long-term perspective, sales increases from the new subsidiary are expected as the semiconductor materials market grows. The company maintains a policy to promptly disclose any further information requiring timely reporting.
Analyst take
The full capital investment in a local Chinese subsidiary becomes a key milestone in restructuring global supply chains. Amidst the fragmentation of the semiconductor market, possessing manufacturing capacity within China is crucial for building customer relationships. While short-term impacts are minimal, investors should monitor changes in revenue structure after the fiscal year ending March 2027. Since consumables like BARC are expected to be ordered regularly, there is strong expectation for them as a stable revenue source.
