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Shin-Etsu Chemical

4063.THIGH

Silicon Wafers / Materials · Weight: 10%· Data as of 2026-05-05

Also in:Semis

¥7,104-1.96%

6-month daily

Investment Thesis

#1 global silicon wafer maker. FY2026 actual (released Apr 28): Revenue ¥2,574B (2nd highest ever), Electronics Materials +8.7% YoY (¥1,115.7B = 43% of revenue) driven by HBM/AI demand. OP ¥635.2B (-14.4%, PVC drag). New ¥250B buyback announced (May 2026–Apr 2027). Gunma ¥83B lithography hub operational. GaN-on-QST: IMEC >650V world record. SK Hynix warned wafer shortage persists through 2030 — Shin-Etsu's 27% global 300mm share benefits structurally. Shintech is a US domestic PVC producer — tariffs are INSULATED / BENEFICIAL. Net cash ¥1.4T.

Risk

FY2027 guidance WITHHELD — no forward earnings anchor until Q1 FY2027 results (Aug 2026). PVC segment (-5.8% YoY, ¥981.3B) recovers slowly; China added 1.9M tons PVC capacity in 2025. Chinese wafer makers expanding but at 4.2% global share, limited to commodity grades (not EUV advanced). EPS missed analyst consensus by ~4% in FY2026.

Monitoring Trigger

FY2026 RELEASED Apr 28: OP ¥635.2B (-14.4%), Electronics Materials +8.7%, FY2027 guidance WITHHELD. Next trigger: Q1 FY2027 (Aug 2026) — if PVC shows recovery AND Electronics Materials margin holds >34%, ADD. If analyst consensus FY2027 OP (¥723.8B) misses by >15%, TRIM. Shintech $3.4B expansion milestones (Phase 1 ~2030).

Key Dates

2026-04-28earningsFY2026 full-year RELEASED: Revenue ¥2,574B (+0.5%), OP ¥635.2B (-14.4%), NI ¥474.5B (-11.2%). FY2027 guidance withheld. New ¥250B buyback. Stock hit all-time high ¥7,351 on Apr 30.

2026-06-30rebalanceSemiannual portfolio rebalance

2026-08earningsQ1 FY2027 results — first signal on FY2027 guidance and PVC recovery trajectory

2030catalystShintech $3.4B Louisiana expansion Phase 1 — +625K tons ethylene, +500K tons VCM capacity

Update History

2026-04-15evolveUPGRADED

View report →

UPGRADED: CEO 'AI stock' pivot, Isesaki plant, GaN-on-QST 800V record, 5.9% total yield, PVC headwind turning

pe:25.7126.70market_cap:¥12.17T¥12.64T

2026-05-05evolveHOLD

View report →

FY2026 full-year results internalized (released Apr 28). Electronics Materials +8.7% YoY. PB corrected 2.81→1.86 (near historical median). FY2027 guidance withheld — uncertainty flagged. New ¥250B buyback. SK Hynix warns wafer shortage through 2030. Thesis HOLD.

pb:2.811.86pe:26.725.0forward_pe:26.0123.5market_cap:¥12.64T¥13.19Troe:11.5%11.1%op_margin:25.6%24.7%div_yield:1.6%1.46%

Key Metrics

23.5

Fwd PE

1.86

P/B

11.1%

ROE

24.7%

Op Margin

D/E

1.46%

Div Yield

+¥346B

FCF

¥13.19T

Mkt Cap

Business Segments

Segment	Revenue	Share	Description
Electronics Materials	¥1,115.7B (FY2026)	~43%	Wafers #1, photoresists, photomask blanks — +8.7% YoY, ~34.8% OP margin
Living Environment & Infrastructure (Shintech)	¥981.3B (FY2026)	~38%	PVC, caustic soda — US domestic producer (tariff insulated). -5.8% YoY. $3.4B expansion to ~2030.
Functional/Other	~¥477B (FY2026)	~19%	Magnets, silicones, LED, processing, GaN-on-QST (pre-commercial)

Supply Chain Evidence

Evidence	Customer	Product	Detail
confirmed	TSMC	300mm wafers, EUV photomask blanks, EUV photoresists	Deep collaborative partnership. Gunma plant exports photoresists to Korea, US, Taiwan. TSMC N2/N3 logic. TSMC CapEx $52-56B in 2026.[source](2026-04)
confirmed	Samsung	Wafers for NAND/DRAM/logic/HBM; EUV photomask blanks (22-41% global share)	Samsung +47% HBM capacity to 250K WPM by end-2026; HBM3E prices +20% for 2026.[source](2026-04)
confirmed	SK Hynix	Advanced ultra-flat wafers for HBM4	HBM4 ramp underway (M15X fab Feb 2026). SK Group chairman: wafer shortage through 2030, supply lags demand 20%+.[source](2026-03)
confirmed	US reshoring fabs	Wafers + photoresists for TSMC AZ, Samsung TX, Intel OH	CHIPS Act friend-shore supplier. Gunma plant provides export capacity.[source](2026-04)

Sources & References

↗StockAnalysishttps://stockanalysis.com/quote/tyo/4063/statistics/↗Shin-Etsu FY2026 Full-Year Results (Kabutan)https://kabutan.jp/news/?b=k202604280085 ↗Nikkei — Buyback & Tariff Commentshttps://www.nikkei.com/article/DGXZQOTG24ALY0U5A420C2000000/↗SEMI Q1 2026 Wafer Shipments +13.1%https://www.semiconductor-digest.com/semi-reports-worldwide-silicon-wafer-shipments-increase-13-year-on-year-in-q1-2026/↗SK Hynix Wafer Shortage Through 2030https://cloudnews.tech/sk-hynix-warns-memory-wafer-shortage-could-last-until-2030/↗Shintech $3.4B Louisiana Expansionhttps://www.manufacturingdive.com/news/pvc-giant-shintech-invest-34b-plaquemine-louisiana-expansion/814172/

Peer Comparison

Company	PE	Fwd PE	ROE	Op Margin	FCF
Advantest	54	44	49.3%	44.2%	+¥375B est.
Tokyo Electron	40.21	30.85	23.9%	24.2%	+¥398B
SCREEN Holdings	23.29	17.85	19.8%	19.0%	+¥49.4B
DISCO Corp	55.44	43	N/A	42.3%	+¥63.7B (OCF ¥133.5B minus capex ¥69.8B; capex doubled FY2025→FY2026)
Lasertec	44.17	45.06	43.0%	46.1%	+¥96B
Shin-Etsu Chemical	25	23.5	11.1%	24.7%	+¥346B
Keyence	43.64	39.9	13.5%	51.0%	+¥451B (cash equivalents; FCF strongly positive given asset-light model)
Renesas Electronics	Loss	17.78	-2.1% GAAP / ~10.5% Non-GAAP	33.7% Non-GAAP Q1 2026 (H1 guided 31.3%)	+¥364B (confirmed: OCF ¥453B minus capex ¥89B)
SoftBank Group	~6.8x nominal (meaningless — non-recurring OpenAI gains)	22.09	~43% nominal (OpenAI-inflated)	N/A (holding company)	-¥1,396B (approx)
SUMCO	Loss	N/A	-1.54%	-0.8%	-¥11B
Socionext	36.77	22.44	6.0%	7.5%	-¥4B
Nitto Boseki	~25x operating basis	22	13%	13%	N/A
Asahi Kasei	13.4	12	7.8%	7%	N/A
Mitsubishi Gas Chemical	12	11	8%	8%	N/A
Meiko Electronics	16	14	15.6%	12%	N/A
Fujimi Inc	18	16	12%	15%	N/A
Hirose Electric	22	20	8%	15%	N/A