Goldman Sachs: Shin-Etsu Chemical (4063.T): AI Business Briefing: Competitive Edge and Growth Potential Centered on Advanced Semiconductors
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Shin-Etsu Chemical held its inaugural AI-related business briefing on March 27, 2026. Goldman Sachs reiterates a Buy rating with a 12-month target price of 7,240 JPY, offering 17.9% upside from the current 6,140 JPY. Management views the current AI boom as structural, projecting global token volume to grow over tenfold by 2026. Shin-Etsu's AI-related sales account for roughly 15% of total revenue, with products spanning the entire AI pyramid. Goldman Sachs highlights the robust potential of the interlayer film business, where Shin-Etsu holds a dominant position, supplying materials for critical layers at 5nm and below. The company plans to expand capacity at its Isesaki plant with an 83 billion JPY investment. Additionally, Goldman emphasizes emerging growth areas like quartz cloth, which utilizes ultra-fine 1.3-micron silica fibers for advanced packaging substrates. Quartz cloth is expected to scale commercially in 2027 alongside M9-grade materials, with management projecting a 48.6 billion JPY market by 2030. Other promising segments include immersion cooling fluids driven by PFAS regulatory substitution and optical communication materials leveraging specialized fiber preforms and Faraday rotator crystals. Goldman values Shin-Etsu using an EV/GCI framework, applying a 10% premium to the sector average.