Jinju Tech to Build Penang Plant for AI Copper Foil

The copper foil industry plays a critical role in the global semiconductor and electric vehicle supply chains. In recent years, driven by the surge in demand for artificial intelligence (AI) servers and high-performance computing, the demand for high-end copper foil has risen in tandem. As one of Taiwan's leading copper foil manufacturers, Jinju Technology (stock code: 6038) has long maintained core competitiveness centered on "high purity and low roughness," establishing a solid customer base in both domestic and international markets. However, with escalating US-China trade frictions and rising costs within Taiwan's supply chain, many customers have begun considering relocating their supply chains to overseas regions with relatively lower costs and tax-friendly systems. In an announcement today, Jinju Chairman Li S-xian stated that to cope with the trend of supply chain migration and overseas utilities infrastructure conditions, Jinju has decided to establish a new plant in Penang, Malaysia. The total investment is estimated to be between NTD 8 billion and NTD 10 billion, with a planned annual capacity of 30,000 tons, focusing on high-end products such as fourth-generation very-low-profile (HVLP4) copper foil.

Penang, Malaysia has become a preferred location for many semiconductor and advanced materials enterprises due to its well-established industrial park infrastructure, low tax rates, and government incentive policies for high-tech industries. The scale of Jinju's investment is considered medium-sized. If the investment and capacity launch proceed smoothly, it will significantly boost Taiwan's market share in the global high-end copper foil market. More importantly, HVLP4 copper foil, owing to its extremely low surface roughness, can effectively mitigate heat dissipation issues in AI servers, enhance system stability and performance, and meet the high-specification demands of major AI server manufacturers in the United States, Europe, and Asia. Jinju has already signed long-term supply agreements with multiple AI server manufacturers in Taiwan, and the capacity of the upcoming plant will be able to directly supply these customers, thereby reducing lead times and logistics costs.

From a financial perspective, an investment of NTD 8 billion to NTD 10 billion is equivalent to approximately USD 320 million to USD 400 million. Assuming the investment costs are recovered within three years, Jinju's payback period will be around three to four years. Given that electricity costs in Malaysia are relatively lower than those in Taiwan, and that the government provides tax exemptions for high-tech industries, the return on investment is projected to be higher than that of domestic investments in Taiwan. On the other hand, establishing a plant in Malaysia will also allow Jinju to diversify risks and reduce the operational impact caused by fluctuations in a single market or supply chain.

Furthermore, Jinju's expansion is not only aimed at meeting the demands of the AI server market, but also represents a deep-seated strategic layout across the entire high-end copper foil industry chain. As demand for high-frequency cables and high-efficiency thermal materials continues to expand in fields such as 5G, the Internet of Things (IoT), and automotive electronics, the application scenarios for HVLP4 copper foil will continue to grow. Jinju's new plant in Penang will be equipped with advanced electroplating and surface treatment technologies, and will introduce automated production lines to enhance capacity utilization and quality stability. This will further solidify Jinju's leading position in the global high-end copper foil market while setting a benchmark for Taiwan's high-tech industry in expanding into overseas markets.

In summary, Jinju's establishment of a new plant in Penang, Malaysia, with an annual capacity of 30,000 tons and a focus on high-end copper foil products such as HVLP4, is both a direct response to the demand of the AI server market and a forward-looking layout for the restructuring of the global supply chain. The scale of the investment and the capacity planning demonstrate the company's high level of confidence in future market trends, and it is expected to achieve new milestones in the global high-end copper foil sector. (Source of facts: CNA)