Shin-Etsu Chemical (4063): 1Q FY2026 results: Wafer demand improves, but PVC weak

Research evidence excerpt

Shin-Etsu Chemical (4063): 1Q FY2026 results: Wafer demand improves, but PVC weak

J P M O R G A N Asia Pacific Equity Research

24 July 2026

Shin-Etsu Chemical (4063) Overweight

4063.T, 4063 JP

1Q FY2026 results: Wafer demand improves, but PVC Price (24 Jul 26):¥6,702

weak Price Target (Dec-26):¥7,000

Somewhat negative: Shin-Etsu Chemical reported 1Q (April–June) FY2026 Japan Equity Research

results and held a results briefing after the July 24 close. We expect results to have

Chemical, Steel

a somewhat negative impact on the share price as FY2026 operating profit

guidance for ¥700 billion is 9.1% below the Bloomberg consensus average Yasuhiro Nakada AC

estimate, and earnings improvement in the North American PVC business is (81-3) 6736-8692

yasuhiro.nakada@jpmorgan.com

slower than the market expects. However, Shin-Etsu said silicon wafer demand has JPMorgan Securities Japan Co., Ltd.

improved to a level where requested shipments exceed current capacity.

• Silicon wafer trends: Silicon wafer shipments grew 7% YoY and 9% QoQ for

all diameters in April–June, with 300mm wafers up 6% YoY and 8% QoQ,

200mm wafers up 15% YoY and 14% QoQ, and 150mm and smaller wafers up

9% YoY and 15% QoQ. Shipments improved sharply for all diameters, and

Shin-Etsu said 300mm wafer shipments in June reached a record high for a

single month. It said inquiries exceed current capacity not only for 300mm

prime wafers, but also for dummy wafers, monitor wafers, and 200mm wafers.

Given that construction costs have risen from its previous capacity expansion

investment around 2021, Shin-Etsu plans to adequately consider prices, uptake

agreements, and other factors rather than hastily expanding capacity. Shin-Etsu

said the remaining periods for long-term agreements vary by customer, with