Analysis of Jianghua Micro's Order Surge and Capacity Matching

Based on the collected information, I will prepare an in-depth analysis report on Jianghua Micro’s order growth and capacity situation.

---

Jiangyin Jianghua Microelectronics Materials Co., Ltd. (Stock Code: 603078.SS) is one of the leading enterprises in China’s wet electronic chemicals industry, focusing on the R&D, production and sales of ultra-high purity reagents and photoresist supporting reagents[0]. The company’s products are mainly used in downstream fields such as semiconductors, flat panel displays, solar energy and LEDs, and are indispensable electronic chemicals suppliers in the pan-semiconductor industry chain[1].

In terms of business structure, the company currently has two core business segments: ultra-high purity reagents business and photoresist supporting reagents business. In the first half of 2025, the ultra-high purity reagents business achieved revenue of RMB 364 million, accounting for 62.67% of the main business revenue; the photoresist supporting reagents business achieved revenue of RMB 200 million, accounting for 34.53%[2]. Relying on advantages such as a wide range of products, large scale, strong supporting capabilities and leading technology, the company occupies an important position in the wet electronic chemicals industry.

According to market information, Jianghua Micro has achieved significant growth in customer orders in the semiconductor wet electronic chemicals sector, with an order volume growth rate of 270%[3]. This explosive growth is mainly driven by the following factors:

. With the escalation of Sino-US trade frictions and the tightening of Japan’s export controls on key semiconductor materials, domestic semiconductor manufacturers are accelerating the domestic substitution of wet electronic chemicals[4]. As one of the few domestic enterprises capable of producing G4-G5 grade high-end wet electronic chemicals, Jianghua Micro directly benefits from this industrial trend.

. Domestic semiconductor industry investment is growing rapidly, and the construction of 12-inch wafer production lines is accelerating, leading to a substantial increase in demand for high-purity wet electronic chemicals. At the same time, the OLED display panel industry is developing rapidly, and leading enterprises such as BOE, Visionox, and Tianma continue to expand production, bringing incremental space to the wet electronic chemicals market[1].

The company achieved operating revenue of RMB 1.099 billion in 2024, a year-on-year increase of 6.73%; net profit attributable to shareholders of listed companies was RMB 81.4333 million, a year-on-year increase of 21.25%[5]. The growth rate of net profit is significantly higher than that of operating revenue, mainly due to the improved net profit of Sichuan Jianghua Micro and the reduced loss of Zhenjiang Jianghua Micro.

Financial Indicator	2024 Figure	YoY Change
Operating Revenue	RMB 1.099 billion	+6.73%
Net Profit	RMB 81.4333 million	+21.25%
R&D Expenses	RMB 58.7103 million	5.34% of Operating Revenue

In the first half of 2025, the company achieved operating revenue of RMB 580 million, a year-on-year increase of 11.30%; net profit attributable to shareholders of listed companies was RMB 48.0696 million, a year-on-year decrease of 15.51%[2]. Operating revenue maintains steady growth, but net profit has declined, mainly affected by rising costs and declining gross profit margin.

Jianghua Micro has carried out strategic layout around the core Yangtze River Delta region and extended along the Yangtze River belt, and currently has three core production bases[2]:

. As the company’s headquarters, the Jiangyin base mainly serves semiconductor and flat panel display customers. In 2024, the capacity utilization rate of this base reached 96.88%, operating close to full capacity, indicating that the existing capacity can no longer fully meet customer demand[5].

. The Zhenjiang project is the key project for the company’s capacity expansion. The first phase of the project has completed plant construction and put into operation, with products including ammonia water, hydrochloric acid, sulfuric acid and other wet electronic chemicals for semiconductors, and some products have formed sales volume among high-end semiconductor customers. In the first half of 2025, the second phase of the Zhenjiang project successfully completed the trial production of G5 grade products including isopropanol, ammonia water and hydrogen peroxide, marking a further improvement in the company’s supporting capabilities for high-grade electronic chemicals related to high-end semiconductors[2].

. The Sichuan base mainly radiates customers in the southwest region. With the improvement of operating efficiency, the net profit of Sichuan Jianghua Micro achieved significant growth in 2024, becoming an important contributor to the company’s overall performance growth[5].

In terms of capacity utilization, the company’s three bases show obvious differentiation:

Base	Capacity Utilization Rate	Remarks
Jiangyin Base	96.88%	Capacity tight, needs expansion
Zhenjiang Base	Relatively low	Still in capacity ramp-up period
Sichuan Base	Relatively low	Operating efficiency continues to improve

The capacity utilization rate of the Jiangyin base is close to 97%, indicating that the base’s capacity is seriously insufficient and unable to meet the demand from order growth. The capacity utilization rates of the Zhenjiang and Sichuan bases are relatively low, mainly due to factors such as production lines still being in the commissioning and customer certification stages, and some high-end products still being in the market expansion stage. The company expects that through strengthening R&D and market expansion of high-end products, the capacity utilization rate will increase significantly in 2025[5].

On August 22, 2025, Jianghua Micro held the 18th Meeting of the 5th Board of Directors, and reviewed and approved the proposal on “Investment in the Construction of the 37,000-Ton-per-Year Ultra-High Purity Wet Electronic Chemicals Project”[6]. The project is implemented by Jianghua Micro (Zhenjiang) Electronic Materials Co., Ltd., a holding subsidiary of the company, and is located in the Zhenjiang New Area Green Chemical New Material Industrial Park in Zhenjiang City, Jiangsu Province.

. The total investment of the project is RMB 289 million, and it is planned to use raised funds of RMB 289 million. The specific composition includes: construction engineering cost of RMB 11.92 million (4.13%), equipment purchase cost of RMB 197 million (68.31%), installation engineering cost of RMB 39.88 million (13.81%), other engineering construction costs of RMB 13.02 million (4.51%), and initial working capital of RMB 26.72 million (9.25%)[7].

. The construction period of this project is 16 months, and the project filing and EIA procedures have been completed[6].

. The main products of this project are G4-G5 grade high-end semiconductor wet electronic chemicals, including ammonia water, hydrochloric acid, nitric acid and other wet electronic chemicals used in the semiconductor field, and the product grade can meet the manufacturing needs of mature and advanced processes of 12-inch wafers[7].

The second phase of the Zhenjiang project has successfully completed the trial production of G5 grade products including isopropanol, ammonia water and hydrogen peroxide. With the steady introduction of products such as ammonia water, hydrochloric acid and sulfuric acid from the first phase of the Zhenjiang project into high-end semiconductor customers, the company’s competitiveness in the high-end field continues to enhance[2].

The implementation of this raised funds project has three strategic significances:

. The semiconductor industry is in a period of rapid development. According to the World Semiconductor Trade Statistics data, the global semiconductor industry market size was USD 515 billion in 2023, and it is expected to grow to USD 1.3 trillion by 2032, with a compound annual growth rate of approximately 10%. As the world’s largest semiconductor market, China accounts for nearly 40% of the global market share, providing broad growth space for wet electronic chemicals enterprises[7].

. The company’s semiconductor-grade hydrochloric acid, semiconductor-grade ammonia water, photoresist developers, strippers, diluents, etching solutions and copper etching solutions supporting KrF, ArF and ArFi immersion photoresists are included in the “Key Strategic Materials” list of the Ministry of Industry and Information Technology’s Catalogue for Guidance of First Application Demonstration of Key New Materials (2024 Edition). The implementation of the project will accelerate the domestic substitution process in the semiconductor materials field[7].

. After the project is completed, it will further expand the company’s capacity layout and product series of high-purity wet electronic chemicals, helping the company seize the first-mover advantage amid the domestic substitution trend in the high-end product field, and laying a foundation for expanding overseas markets and enhancing international influence[7].

Based on existing information and order growth, Jianghua Micro faces the following capacity challenges:

. The 96.88% capacity utilization rate of the Jiangyin base means that the existing capacity is close to saturation, unable to undertake incremental orders. The 270% order growth will put great pressure on the company’s capacity in the short term[5].

. Although the 37,000-ton-per-year project has started, the construction period is 16 months, and production is expected to commence in early 2027. After the successful trial production of the second phase of the Zhenjiang project, it will still take some time to reach full production capacity[6].

. The relatively low capacity utilization rates of the Zhenjiang and Sichuan bases reflect that high-end products still need to go through customer certification and capacity ramp-up processes from trial production to large-scale mass production.

Despite short-term capacity pressure, the company also has multiple capacity guarantee capabilities:

. The first phase of the Zhenjiang project has completed plant construction and formed actual sales, and the company has mature construction experience in G5 grade high-end semiconductor wet electronic chemicals factories, providing strong support for the smooth implementation of the second phase project and the raised funds project[7].

. The Jiangyin, Zhenjiang and Sichuan bases form regional complementarity, which can flexibly allocate production resources according to order conditions and optimize capacity utilization efficiency.

. The company’s R&D expenses reached RMB 58.71 million in 2024, accounting for 5.34% of operating revenue. The R&D team continues to focus on product development in the fields of high-end semiconductors and new display panels, continuously improving product performance and market competitiveness[5].

. The company has optimized its supply chain and established long-term cooperative relationships with upstream suppliers, effectively stabilizing raw material prices and laying a foundation for capacity expansion[5].

Based on comprehensive assessment, the capacity matching situation between Jianghua Micro’s capacity and order growth is as follows:

Time Period	Capacity Matching Degree	Explanation
2024-2025	Tight	High existing capacity utilization, new capacity not yet released
2026	Improved	Capacity of the second phase of Zhenjiang gradually released
2027	Balanced	37,000-ton-per-year project put into operation, capacity greatly improved

The wet electronic chemicals industry, as an interdisciplinary field of fine chemical industry and electronic information industry, has characteristics such as a wide variety of products, high technical barriers, and rapid upgrading. According to data from the China Electronic Materials Industry Association, the domestic wet chemicals market demand is expected to grow to 4.6045 million tons by 2025[5].

. With the development of Moore’s Law and the progress of domestic semiconductor industry, the domestic substitution and upgrading demand of wet electronic chemicals will bring new growth opportunities to the industry.

. The lithography and etching processes of OLED display panels have higher requirements for the purity and dosage of wet electronic chemicals. The OLED production line layout of enterprises such as BOE, Visionox, and Tianma provides development opportunities for domestic wet electronic chemicals manufacturers[1].

. The project construction progress may be affected by factors such as approval, construction, and equipment commissioning, leading to delayed capacity release.

. High-end semiconductor customers have a long certification cycle for suppliers, and it may take a long time to form effective sales after new capacity is released.

. The main raw materials of wet electronic chemicals are basic chemical products, and price fluctuations may affect the company’s gross profit margin.

. Domestic and foreign competitors continue to expand production, which may lead to intensified industry competition and downward price pressure.

As a leading enterprise in China’s wet electronic chemicals industry, Jianghua Micro has significant advantages in technical accumulation, customer resources, capacity layout and other aspects. With the acceleration of the semiconductor domestic substitution process and the implementation of the company’s capacity expansion projects, the company is expected to fully benefit from industry growth.

: Capacity utilization remains at a high level, order growth may lead to delivery pressure. It is recommended to pay attention to the company’s capacity ramp-up progress and customer expansion.

: The capacity of the second phase of the Zhenjiang project will be gradually released, coupled with the preparation for the commissioning of the 37,000-ton-per-year project, capacity pressure is expected to be relieved.

: With the commissioning of multiple capacity projects, the company will have strong capacity scale advantages, and its competitiveness in the high-end semiconductor wet electronic chemicals field will continue to enhance.

Jianghua Micro’s 270% order volume growth reflects the demand surge amid the domestic substitution trend of semiconductor wet electronic chemicals. From the perspective of capacity matching, the 96.88% capacity utilization rate of the company’s Jiangyin base indicates that the existing capacity can no longer fully meet the order growth demand, and the short-term capacity pressure is relatively significant.

However, the company has taken active measures to address capacity challenges: the second phase of the Zhenjiang project has successfully completed trial production and will gradually release capacity, the 37,000-ton-per-year ultra-high purity wet electronic chemicals project has started construction, and the synergy effect of the three bases is gradually emerging. It is expected that with the gradual release of new capacity, the company’s capacity matching degree will be significantly improved in 2026-2027.

In the medium and long term, as a leading enterprise in China’s wet electronic chemicals industry, Jianghua Micro will continue to benefit from the historical opportunities of semiconductor domestic substitution and display panel industry upgrading, and has good growth potential.

---

[0] Jinling API Company Profile Data

[1] Kaiyuan Securities Research Report - Domestic Wet Electronic Chemicals Leader, Actively Expanding Capacity, Promising Prospects

[2] Jianghua Micro 2025 Semi-Annual Report

[3] 36Kr - Golden Opportunity for Domestic Substitution of Electronic Chemicals: Leading Enterprises in Three Tracks Embrace Highlight Moments

[4] Eastmoney - This Export Control for Military Use Against Japan Benefits Strategic Metals Such as Rare Earths, Tungsten-Molybdenum, Lithium, Etc.

[5] Sina Finance - Jianghua Micro: Capacity Utilization Rate Expected to Increase Significantly in 2025

[6] Jianghua Micro Company Announcement - Announcement on Investment in the Construction of the “37,000-Ton-per-Year Ultra-High Purity Wet Electronic Chemicals Project”

[7] Jianghua Micro Feasibility Analysis Report on the Use of Raised Funds