Goldman Sachs Japan Chemicals: Micron–GlobalWafers 10-Year Wafer Agreement Positive for Japanese Wafer Makers
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Key Views
The 10-year contract duration far exceeds the industry-typical 5–7 years. Signed within the historically cyclical memory sector, this agreement signals improved structural visibility into future demand and heightened concerns over wafer supply tightness and procurement. Shin-Etsu Chemical noted at its shareholder meeting that since May–June, AI-driven wafer demand has expanded faster than expected, with numerous clients recognizing potential shortages across semiconductor materials for 2027/2028.
300mm wafer supply-demand has tightened rapidly, building momentum for the next LTA round. Meanwhile, wafer companies remain cautious on new investment given surging greenfield costs and construction delays. SUMCO announced on March 27, 2026 that it slashed its initial capacity expansion—including the Yoshinogari plant in Saga Prefecture—to roughly one-quarter of the original plan. Goldman expects wafer firms to materially raise hurdle rates, making significant price hikes in the next LTA round essential, with adjustment magnitudes potentially exceeding the prior two cycles.
Outlook
Shin-Etsu Chemical: 12-month target price ¥9,610. SUMCO: 12-month target price ¥6,140.