Shin-Etsu Posts Operating Income of ¥385,918 Million in First Half
Key Facts
Shin-Etsu Chemical posted operating income of ¥385,918 million for the six months ended September 30, 2026, up 15.6% year on year, as consolidated sales rose 10.6% to ¥1,420,684 million. Net income attributable to owners of the parent increased 11.3% to ¥286,939 million, according to results announced by the company. Electronics materials led the improvement, with the company linking growth in the semiconductor market to AI investment centered on data centers. By contrast, operating income in the infrastructure materials segment fell as the PVC market weakened in Asia and surrounding regions. Profit growth followed declines in operating income and net income in the first half of the previous year.
Electronics materials segment sales totaled ¥577.7 billion from April to September, up 16% from the corresponding period, while operating income rose 28% to ¥218.9 billion. The company said the semiconductor market grew strongly on the back of "historical investment related to AI, centered on data centers." It said supply had become limited for some products, so it coordinated supplies and reviewed prices to increase semiconductor materials sales. The results put the electronics segment at the forefront of profit growth in the first half. They also reflect the widening impact of data center-related spending on the market for materials used in semiconductor manufacturing.
Growth extended to the functional materials segment, where sales rose 11% to ¥245.6 billion and operating income increased 31% to ¥63.2 billion. The company attributed the improvement in profitability to higher sales of high-value-added products. In infrastructure materials, sales rose 4% to ¥522.1 billion, but operating income fell 16% to ¥86.2 billion. The company said excess inventory and slowing demand in Asia and surrounding regions weakened the PVC market. It added that market conditions deteriorated in the second half of May, before it implemented a price increase in July, and prices remained stable despite market volatility.
Shin-Etsu said operating income rose 27% and ordinary income 20% in the July-to-September quarter compared with the same period a year earlier. For the first half, operating income rose 15.6% and net income 11.3%, after falling 17.7% and 12.3%, respectively, in April–September 2025. The company described the global economy as having achieved real GDP growth within the 3% range cited by the International Monetary Fund in that fiscal year's World Economic Outlook. It added that AI investment helped the economy remain resilient amid trade and geopolitical tensions, inflationary pressures and higher interest rates. Segment results show divergent performance, with strength in electronics and functional materials and pressure on the infrastructure market.
The company kept its forecast for the fiscal year ending March 31, 2027, unchanged, projecting sales of ¥2,700,000 million, operating income of ¥700,000 million and net income of ¥525,000 million. The estimates come despite first-half growth in sales and profits, while PVC performance remains one of the sources of pressure cited by the company. It set November 13, 2026, as the filing date for its semiannual securities report and November 18 as the dividend payment date. Its investor relations calendar also lists January 27, 2027, as the date for announcing third-quarter results. SHECY shares closed at 19.35 on October 27, compared with a close of 18.37 on October 26, according to EL7 data.