October 9, 2026 / SemiMedia / — Sumitomo Bakelite plans to invest approximately ¥10 billion, or about $63.2 million, to add semiconductor packaging material production lines at its plants in Suzhou, China, and Singapore, with the new capacity expected to begin operation in fiscal 2030.

The expansion is aimed at growing demand for advanced semiconductor packaging materials as generative AI and data center investment continue to increase. Higher-power chips require packaging materials with stronger heat resistance, mechanical strength and long-term reliability.

Sumitomo Bakelite is one of the world's leading suppliers of semiconductor packaging materials. The company had already announced in June that it would add production lines at its Suzhou facility to increase capacity by the end of 2028. The latest investment further expands its manufacturing footprint across China and Singapore.

China is also an important part of the company's localization strategy. Expanding production closer to customers is expected to improve supply flexibility while reducing exposure to transportation and other external supply-chain risks.

Sumitomo Bakelite is also expanding its materials business through acquisitions. In January, the company announced plans to acquire Kyocera's chemical materials business for approximately ¥30 billion, further broadening its semiconductor and electronics materials portfolio.

Other Japanese materials suppliers are also increasing investment in Asian semiconductor markets, including new semiconductor materials operations and expanded capacity for photoresist developers and electronic substrate materials. Growing demand from AI chips, advanced packaging and high-performance computing is making semiconductor materials an increasingly important investment area for Japanese chemical and electronics companies.