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(AWP Alliance News) - Shin-Etsu Chemical Co Ltd on Tuesday reported an improvement in second-quarter earnings, supported by strong demand from the artificial intelligence-related sector.
The Tokyo-based chemical company said attributable net income climbed 19% on-year to JPY156.1 billion in the second quarter ended September 30, from JPY131.4 billion a year prior. Net sales rose 16% to JPY758.2 billion from JPY655.9 billion.
The fuller half-year figures show attributable net income shot up 11% to JPY286.94 billion from JPY257.84 billion 12 months earlier. Net sales were up 11% on-year to JPY1.420 trillion from JPY1.285 trillion.
Shin-Etsu is a manufacturer of silicon wafers, a key semiconductor component, giving it exposure to the burgeoning AI chip sector. It also provides products which have applications in plant assembly equipment, sewerage systems and cosmetics.
Its Electronics Materials division, the most exposed to AI and data centres, was its largest profit and sales contributor. Net sales there shot up 16% on-year in the first half to JPY577.7 billion from JPY496.3 billion. Operating income was up 28% to JPY218.9 billion from JPY170.6 billion.
In the first half of the prior year, the Infrastructure Materials arm generated the most sales, at JPY500.4 billion. In the first half just ended, the unit achieved sales growth of 4.3% to JPY522.1 billion. Infrastructure Materials operating income fell 16% to JPY86.2 billion from JPY102.3 billion. Profit at the unit was below what Electronics Materials achieved both this year and in the year prior.
"The semiconductor market grew significantly, driven by what could be called historic AI-related investment, centred on data centres. As a result, the supply of some products became tight. We increased the sales of semiconductor materials by implementing meticulous supply coordination and revising prices," Shin-Etsu said.
Shin-Etsu lifted its second-quarter dividend by 47% to JPY78 from JPY53. It pays two dividends a year. The second quarter payout includes a JPY20 special dividend commemorating the firm's centenary.
It expects to lift its final payout by 9.4% to JPY58 from JPY53, giving a total annual dividend of JPY136, which would be a 28% increase from JPY106.
Shin-Etsu has kept its earnings forecast unchanged, seeing annual attributable profit growth of 11% to JPY525.0 billion from JPY474.4 billion, and a net sales rise of 4.9% to JPY2.700 trillion from JPY2.574 trillion.
Shares in the company rose 1.2% to JPY5,850 each in Tokyo on Tuesday. The earnings were released after the closing bell in Tokyo.
By Eric Cunha, Alliance News news editor
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