Shin-Etsu plans to invest around USD 700 Mn to boost silicone production

Shin-Etsu Chemical, a Japanese company, is planning to increase its high-performance silicon production which is used in electric vehicles. Its aim is to enhance its position in the market which is further expected to increase the shift to a low carbon economy.

The Japanese company’s production of silicon thermal interface materials is expected to be double by 2025. The material is used to cover the semiconductors and batteries to help them release heat. With the unavailability of this coolant, chips and batteries may overheat which further damages its performance and could reduce the range of electric vehicles.

Shin-Etsu will invest this in the Gunma and Fukui plant, where a variety of materials are made, including materials used in construction and cosmetics. The investment aims to the expansion of production lines for EV materials and increases production by 20% to 100%. The total investment is expected to amount to US$ 694 million by 2025.

According to Shin-Etsu, the global silicon market size was estimated at around USD 14 billion in 2020 and is expected to grow at a CAGR of around 4% in next upcoming years. Shin-Etsu is the largest market player in Japan and holds a significant market share of 15% of the global market.

Dow Chemicals is accounted as the largest market player in the world and is estimated to hold the largest market share of 35% of the global silicon market. The Japanese company Shin-Etsu is expected to increase its market share by investing more in the market.

Japanese companies Shin-Etsu remain competitive in the high-performance materials used in chips and EVs, while their Chinese and Korean rivals increasingly dominate the markets for more commodity products. Furthermore, specialty chemicals are expected to register a strong demand in the market due to the increasing electrical vehicles industry in Japan, and the Japanese EV makers are trying to hold a significant market share globally in next upcoming years.