TOKYO – Hitachi Chemical will cease manufacturing of several laminate products by the end of 2022, even as the company prepares for acquisition by an entity backed by Showa Denko K.K.

Hitachi Chemical will end production of CEM-3, some FR-4 products, and mass lam products by September 2022, according to reports. The company will continue to manufacture high-end materials for IC substrates and high-frequency materials, sources told PCD&F.

The decision to exit lower-end materials production appears to be driven by lower demand and pricing pressure tied to competition from lower-cost regions. Also, the current margins do not support investment in new manufacturing equipment, sources told PCD&F.

On Dec. 18, the board of directors of Hitachi Chemical issued a statement in support of a tender offer by HC Holdings K.K., a wholly owned subsidiary of Showa Denko. That deal is expected to close in 2022. It has been suggested Hitachi is jettisoning the lower-end materials to beef up its bottom line prior to the acquisition.

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