JX Advanced Metals (TYO:5016) plans a third increase this fiscal year in production capacity for optical communications materials to meet rising demand from AI data centers, Nikkei reported Tuesday.

The company is weighing investments at sites including its expanding Hitachinaka plant in Ibaraki prefecture and its Arizona facility. The focus is on indium phosphide substrates, a key material used in high-speed optical devices that convert signals between light and electricity inside data centers, according to the report.

JX Advanced Metals has already outlined two capacity increases this year, with combined spending of 4.8 billion yen, lifting output by 50% by fiscal 2027, the report said.

President Yoichi Hayashi said at least one more expansion will be revealed before the end of fiscal 2025, with total additional investment likely to reach several billion yen, according to the report.

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