Shin-Etsu Polymer Co.,Ltd.

Business Details

A segment that manufactures and sells input/output components and peripheral components for automobiles and electronic equipment. Main products include Input Devices (automotive switches, touchpads, etc.), Display-related Devices (VCF) (VCF, etc.), and Component-related Products (Fire-retardant Cushions, Silicone Molded Products, etc.). In addition to domestic manufacturing bases, the company operates a global framework with manufacturing subsidiaries in Malaysia, China, Hungary, and India, and sales subsidiaries in the United States, Europe, and various Asian countries.

Recent Overview

Substantial growth in Component-related Products drove results, with operating profit up 43.9% year on year

In FY2026 (ending March 2026), the Electronic Devices Business recorded net sales of ¥25,726 million (up 3.5% year on year) and operating profit of ¥1,713 million (up 43.9% year on year). The main factor was that Component-related Products significantly exceeded the same period of the previous year due to increased demand for automotive silicone molded products such as wiper components and fire-retardant cushions. Cumulative automotive Input Devices were below the same period of the previous year but trended on a recovery track. Connectors for liquid crystal connection and inspection were weak, but VCF maintained a stable level of demand.

Key Products

Growth Drivers

• Recovery in demand for automotive Input Devices accompanying the expanding adoption of hybrid vehicles and environmentally friendly vehicles
• Mass production and expanded sales of fire-retardant cushions for EV batteries (growth area)
• Progress in demonstration and development toward mass production of heat-resistant thin films for automotive electronic components
• Expansion of connectors for liquid crystal connection, etc., against a backdrop of steady demand for consumer equipment
• Strengthening of the supply framework leveraging global manufacturing bases in Malaysia, China, Hungary, India, etc.

Risks

• Downward pressure on demand for automotive-related products overall due to a prolonged slowdown in EV sales
• Spillover effects on the automotive industry from US trade policy (tariff increases)
• Weakness in connector-related products due to sluggish demand for inspection connectors, etc.
• Uncertainty in the pace of recovery in demand for automotive Input Devices
• Impact of exchange rate fluctuations (yen appreciation) on the performance of overseas manufacturing and sales subsidiaries

Business Details

Manufactures and sells transport materials for semiconductor wafers and electronic components (Semiconductor-related Containers, Carrier Tape-related Products), OA Equipment Parts (Printer Rollers, etc.), and Silicone Rubber Molded Products (catheter components for medical devices, etc.). Its main customers are semiconductor manufacturers and electronic equipment manufacturers both in Japan and overseas, and it is a globally deployed segment with manufacturing bases in Malaysia, Indonesia, and China (Dongguan). It is the largest segment, accounting for approximately 52% of consolidated net sales, and has maintained a high level of profitability against a backdrop of expanding demand for AI-related semiconductors.

Recent Overview

Net sales up 6.7% year on year, but operating profit slightly declined and margin fell

In FY2026 (ending March 2026), the Precision Molded Products Business achieved increased sales of ¥59,773 million (up 6.7% year on year), while operating profit slightly declined to ¥10,218 million (down 0.2% year on year). Semiconductor-related Containers performed well, with both shipping containers and in-process containers benefiting from expanding AI-related demand, and Silicone Rubber Molded Products also grew due to strength in medical device applications. On the other hand, OA Equipment Parts continued to be affected by the demand cycle for printer rollers, and a ¥276 million year-on-year increase in depreciation and amortization was a factor in the decline in margin.

Key Products

Growth Drivers

• Expanding demand for Semiconductor-related Containers (shipping containers and in-process containers) due to increased demand for advanced semiconductors accompanying the practical application of generative AI
• Continued strength in carrier tape for large electronic components for AI servers
• Continued growth of Silicone Rubber Molded Products for medical devices (catheters, etc.)
• Medium- to long-term demand expansion against a backdrop of digitalization and AI utilization progress in the semiconductor industry
• Continued priority investment in growth areas under the medium-term management plan 'SEP G&G 2027'

Risks

• Downward pressure on Carrier Tape-related Products due to sluggish general-purpose semiconductor market conditions
• Instability in OA Equipment Parts due to fluctuations in the demand cycle for printer rollers
• Impact on the semiconductor supply chain from US trade policy (tariff increases)
• Exchange rate fluctuation risk at overseas manufacturing bases (Malaysia, Indonesia, China)
• Downward pressure on profit margins due to rising costs accompanying expanded capital investment (increased depreciation and amortization)
• Utilization rate and demand recovery risk following large-scale capital investment in Semiconductor-related Containers

Business Details

Manufactures and sells resin processed products such as food packaging materials (Wrapping Film and Other Packaging Material Products, etc.) and housing-related materials, as well as Functional Compounds, Conductive Polymers, and Exterior Materials-related Products for automobiles, machine tool components, and electronic components. Main customers are the food service industry (commercial small-roll wrap) and industries for wire coating applications including the ASEAN market. The company, together with its subsidiaries Hymix Co., Ltd. and Shin-Etsu Polymer (Thailand) Ltd., is responsible for manufacturing and sales. The deconsolidation (absorption merger) of Kitchenista Co., Ltd. has integrated the manufacturing and sales functions of the wrapping film business.

Recent Overview

Sales declined, but operating profit rose 19.7% year on year, with profitability substantially improved

In FY2026 (ending March 2026), net sales decreased to ¥21,513 million (down 2.6% year on year), while operating profit substantially increased to ¥1,631 million (up 19.7% year on year). The expanded adoption of Color Wrap for the food service industry contributed, and Functional Compounds exceeded the same period of the previous year due to a recovery in demand in the ASEAN market and a rebound in wire coating applications for FA equipment. The decline in sales is attributed to the effects of the transfer of the vinyl chloride pipe business and other factors, and improvement in the profit structure is progressing.

Key Products

Growth Drivers

• Improved share of commercial small-roll wrap through expanded adoption of Color Wrap (a high-value-added proprietary product) for the food service industry
• Recovery in demand for Functional Compounds in the ASEAN market and expanding demand for wire coating applications (for FA equipment, etc.)
• Continued integration of manufacturing and sales and rationalization effects through the absorption merger of Kitchenista Co., Ltd.
• Policy of thoroughly differentiating the base area and expanding market share through proprietary products under the medium-term management plan 'SEP G&G 2027'

Risks

• Risk of renewed market inventory adjustment for Functional Compounds and risk of fluctuation in ASEAN market demand
• Risk of spillover effects on overseas demand from US trade policy and tariff increases
• Risk of fluctuation in raw material (vinyl chloride resin, etc.) procurement costs (dependence on procurement from parent company Shin-Etsu Chemical Co., Ltd.)
• Risk of intensifying competition and price competition in the food packaging materials market
• Impact of reduced sales scale due to the transfer of businesses such as vinyl chloride pipes

Business Details

The 'Others' segment consolidates businesses not included in the reportable segments (Electronic Devices, Precision Molded Products, Living Environment & Materials), and mainly consists of Architecture, Store Design & Construction (Construction-related Business), among others. Although small in scale, accounting for approximately 7.0% of total group net sales of ¥115,116 million (FY2026, ending March 2026), it maintained stable growth with sales up 6.2% and profit up 0.6% year on year.

Recent Overview

Full-year FY2026 (ending March 2026) saw increased sales and profit, but the rate of profit growth slowed substantially

For the full year FY2026 (ending March 2026), the 'Others' segment recorded net sales of ¥8,103 million (up 6.2% year on year) and operating profit of ¥476 million (up 0.6% year on year). Net sales increased by ¥475 million from ¥7,628 million in the previous year, contributed to by orders received in the construction-related business, among others. On the other hand, the rate of increase in operating profit slowed substantially from a 21.6% increase in the previous year to a 0.6% increase, and the scope for profitability improvement remains limited.

Key Products

Growth Drivers

• Sales expansion through order acquisition in the construction-related business (net sales up 6.2% year on year in FY2026, ending March 2026)
• Contribution to overall group profitability through increased sales of Other Processed Products
• Utilization of intra-group service functions through Shin-Etsu Finetech

Risks

• The rate of increase in operating profit slowed substantially from a 21.6% increase in the previous year to a 0.6% increase, making profitability improvement a challenge
• Risk of order fluctuation specific to the construction-related business and risk of rising construction costs
• Limited scope for business scale expansion given the small segment size (approximately 7.0% of group net sales)
• Impact on orders due to uncertainty in the external environment, including US trade policy and rising raw material and logistics costs