Recently, Shin Etsu Chemical, a global leader in PVC (polyvinyl chloride) and semiconductor silicon wafers, announced its Q2 2024 financial report. Its overall performance exceeded the company's previous expectations, with operating profit returning to growth for the first time in six quarters. Shin Etsu Chemical stated that the semiconductor silicon wafer market is about to experience a bottoming out rebound, and the shipment volume of 12 inch products will gradually increase after the third quarter driven by AI demand.
According to the financial report, although Shin Etsu Chemical's PVC sales shrank in the second quarter, sales of semiconductor materials such as silicon wafers increased, and consolidated revenue decreased by 0.2% compared to the same period last year to 597.9 billion yen; The consolidated operating profit increased by 0.1% year-on-year to 191 billion yen, although the growth rate was relatively small, this was also the first time in nearly six quarters that Shin Etsu Chemical's profit showed growth; The consolidated net profit decreased by 6.3% year-on-year to 144 billion yen, marking the sixth consecutive quarter of contraction. However, compared to Shin Etsu Chemical's expectations for the previous quarter (operating profit of 165 billion yen and net profit of 120 billion yen), the second quarter performance was better than expected.
From the perspective of major businesses, Shin Etsu Chemical's revenue from its PVC based "living environment basic materials (including caustic soda and other products)" business decreased by 3.3% to 232.5 billion yen in the second quarter compared to the same period last year, with operating profit falling by 15.2% to 67.9 billion yen. Shin Etsu Chemical pointed out that due to the increase in export volume of Chinese PVC manufacturers, the competition in the PVC market has become more intense, which has brought certain pressure to sales. However, PVC prices have been raised with North America as the center.
Shin Etsu Chemical's "Electronic Materials (including rare earth magnets, photoresists, synthetic quartz, etc.)" business, which focuses on semiconductor silicon wafers, saw a 3.0% increase in revenue to 227 billion yen and an 11.8% increase in operating profit to 89.5 billion yen in the second quarter, ranking first among all businesses in terms of profit.
Shin Etsu Chemical stated that the adjustment situation in the semiconductor market since autumn 2022 has roughly bottomed out, and the recovery situation varies depending on the application and field. In this situation, we are committed to shipping semiconductor materials such as silicon wafers and photoresist according to the original plan.
Shin Etsu Chemical's previously released forecast for the fiscal year 2024 (April 2024 March 2025) optimistically stated that its consolidated revenue will increase by 3.5% annually to 2.5 trillion yen, consolidated operating profit will increase by 4.8% annually to 735 billion yen, and consolidated net profit will increase by 2.5% annually to 533 billion yen.
