JCET lifts 2026 capex plan 65% to RMB18.2 billion

JCET, China's largest chip packaging and test company, raised its 2026 investment plan by 65% to RMB18.2 billion on 23 October, which tells us the step where AI chips are assembled is now short enough that the packager is spending about twice its operating cash flow to add room, and borrowing and selling shares to pay for it.

What happened?

• The plan: On 23 October 2026 the board of Jiangsu Changjiang Electronics Technology (JCET), listed in Shanghai, approved raising its 2026 investment plan from RMB11.01 billion to RMB18.20 billion. The fixed-asset part, meaning plant and equipment, goes from RMB9.98 billion to RMB17.31 billion. Shareholders vote on it on 10 November.
• The quarter: The same evening JCET filed its third-quarter report. Revenue was RMB11.43 billion, up 13.53% from a year earlier. Net profit attributable to shareholders was RMB773 million, up 59.99%, and profit excluding one-off items was RMB753 million, up 117.43%.
• Why it says it is growing: JCET said demand linked to AI infrastructure and devices is rising fast, customer orders keep growing and capacity utilisation is running high. Computing electronics was 30.9% of nine-month revenue and grew 54%.
• The money: On the same day JCET said the state asset regulator, SASAC, had approved in principle its plan to sell up to RMB6.5 billion of new shares to no more than 35 investors, including its controlling shareholder. That sale also goes to the 10 November vote, then needs exchange and securities regulator approval.

Why does it matter?

The direct signal. Packaging is the step that turns a finished silicon die into a working chip: mounting it on a substrate, joining it to memory, testing it. For AI accelerators it is now a bottleneck in its own right, which is why Nvidia booked 2.5 times more substrates and why Amkor and test houses signed multi-billion-dollar capacity deals. JCET is the Chinese side of the same squeeze. When a packager raises its spending plan by two-thirds in October, with only one quarter left in the year, it is responding to orders it already sees.

The second-order signal: the factory is the stuck step, not demand. The filing shows a company building ahead of its sales:

• Our arithmetic: cash paid for plant and equipment was RMB8.89 billion in the first nine months, 2.04 times the RMB4.36 billion a year earlier, while nine-month revenue grew only 7.96%.
• Construction in progress, factories and lines being built but not yet running, rose 78% to RMB6.94 billion from RMB3.89 billion at the end of 2025.
• Inventory rose 62% to RMB6.16 billion from RMB3.81 billion. For a packager much of that is customer chips and materials waiting to be processed, so it points to a full queue as well as to stock bought ahead.

Who pays for the gap. Operating cash flow was RMB4.30 billion in nine months. Our arithmetic: spending on plant ran about RMB4.59 billion above that. JCET covered it by running down cash and short-term investments, which together fell to about RMB5.36 billion from about RMB8.78 billion at the end of 2025, and by borrowing. Short-term bank loans rose to RMB3.23 billion from RMB1.03 billion, and bonds outstanding doubled to RMB4.80 billion from RMB2.40 billion. Total liabilities rose to RMB30.12 billion from RMB24.23 billion.

Margins say the room is worth building. Our arithmetic from the income statement: nine-month gross margin was about 16.0%, against about 13.7% a year earlier, the 2.3 percentage-point rise JCET itself reported. Profit is rising much faster than sales because higher-value work is a growing share of the mix and the lines are full.

What does it change?

Near term (to the end of 2026)

• Fourth-quarter spending has to jump. Our arithmetic, and only a rough guide since a plan is not the same as cash paid: if JCET spent its full RMB17.31 billion fixed-asset plan this year, it would pay out about RMB8.4 billion in the fourth quarter alone, almost as much as in the first nine months together. More likely, part of it rolls into orders placed now for equipment delivered in 2027.
• Equipment makers get the orders first. Bonders, dicing saws, test handlers and inspection tools are bought before a new line earns anything. That is the part of the chain that gets paid on this plan before JCET does.
• More debt before the share sale. Until the RMB6.5 billion sale is approved and completed, the gap is carried by loans and bonds. Net financial costs were RMB355 million in nine months, up from RMB287 million, mostly because interest earned on cash fell as the cash was spent; interest paid on debt was RMB284 million, down from RMB344 million, so the cost of the new borrowing is still to show.

Longer term (2027 and beyond)

• The share sale shows where the room goes. JCET's feasibility report earmarks RMB1.5 billion for a high-performance computing advanced packaging line (a RMB2.35 billion project), RMB1.0 billion for power-module packaging, RMB1.1 billion for wafer-level packaging, RMB1.0 billion for high-capacity memory system-in-package and RMB1.9 billion for working capital and loan repayment.
• A new plant in Shanghai. In June the board approved a RMB7.8 billion advanced packaging and test plant in Lingang, Shanghai. JCET says the subsidiary has been set up and the project is moving forward.
• What we cannot see yet: who the AI customers are, how much of the new room is for Chinese accelerators versus foreign chips, and how long the lines take to qualify. Building a line and getting a customer to approve it for a high-end AI chip are separate steps, and the second can take months.

What should we watch next?

• Amkor's third-quarter results on 26 October. The largest US-based packager is the closest outside check on whether advanced packaging demand is broad or limited to a few AI customers. It is on our Catalyst calendar.
• JCET's results call on 27 October, 15:00 to 16:30 China time. Listen for how much of the higher plan is for computing and AI packaging, and when the new lines start running.
• The shareholder vote on 10 November. The meeting votes on both the raised 2026 investment plan and the RMB6.5 billion share sale. After that the sale still needs the Shanghai exchange and the securities regulator.
• What would weaken the catalyst: a cut to the plan, the share sale stalling, inventory growing faster than revenue for another quarter, or utilisation falling as new lines open.

FAQ

What does JCET do?
JCET packages and tests chips for other companies. It takes finished silicon dies from chip designers and foundries, mounts and connects them, and tests the result. It is the largest company in this business in mainland China.

Is the RMB18.2 billion already spent?
No. It is a plan for the whole of 2026 and still needs shareholder approval on 10 November. JCET paid RMB8.89 billion for plant and equipment in the first nine months.

Why does packaging matter for AI chips?
AI accelerators are now built from several dies joined to stacks of high-bandwidth memory on one package. That step needs special lines and substrates, and there is not enough of either, so packaging capacity limits how many AI chips can ship. Our chiplet explainer covers why.

Does the share sale dilute existing holders?
JCET can issue up to about 127.9 million new shares, around 7.1% of today's 1.79 billion shares by our arithmetic. The final number depends on the price set at issue.

Takeaway: JCET's plan shows China's packaging step is short of room, and the bill for adding it lands in the fourth quarter, on equipment makers' order books and on JCET's balance sheet before any new revenue arrives.

References

1. JCET, 2026 third-quarter report, 23 Oct 2026.
2. JCET, resolutions of the fourth meeting of the ninth board (investment plan adjustment), 23 Oct 2026.
3. JCET, notice on SASAC approval of the 2026 share sale, 23 Oct 2026.
4. JCET, notice of the second extraordinary shareholder meeting of 2026, 23 Oct 2026.
5. JCET, notice of the 2026 third-quarter results call, 20 Oct 2026.
6. JCET, feasibility report on the use of proceeds from the 2026 share sale, 4 Sep 2026.
7. Giantec Semiconductor, 2026 third-quarter report, 23 Oct 2026.
8. Advanced Fiber Resources, 2026 third-quarter report, 22 Oct 2026.
9. Shijia Photonics, 2026 third-quarter report, 21 Oct 2026.
10. Texas Instruments, Q3 2026 earnings call transcript, 21 Oct 2026.