Japan's Shin-Etsu 9-mth profit up 27%, keeps outlook
TOKYO, Jan 17 (Reuters) - Japanese silicon and chemicals maker Shin-Etsu Chemical Co Ltd (4063.T) said on Thursday its profit rose 27 percent in the nine months to December on brisk sales of wafers used to make microchips, and it stuck to its annual outlook.
Shin-Etsu, the world's biggest maker of silicon wafers, earned a net profit of 143.43 billion yen in the nine months to Dec. 31, up from 113.20 billion yen in the same period a year earlier and beating a consensus estimate of 138 billion yen.
Shin-Etsu, which along with rival Sumco Corp (3436.T) controls more than half of the world's silicon wafer market, kept its full-year profit outlook for a record 187 billion yen, compared with a market consensus of 189.6 billion yen by 21 analysts.
Silicon wafer makers have benefited from a shift by microchip makers to cost-efficient 300-mm wafers, making up for declining demand and prices for smaller 200-mm wafers.
But chip price falls that are eroding profits at clients such as South Korea's Samsung Electronics Co Ltd (005930.KS) and Hynix Semiconductor Inc (000660.KS) could weigh on wafer prices and squeeze margins as prices of raw materials like silicon climb, analysts say.
Shares of Shin-Etsu have fallen about 35 percent since hitting a record high in July on fears about wafer prices and worries that credit woes in the United States would hurt sales of construction materials. Sumco shares dropped 60 percent in the same period.
U.S. unit Shintech Inc makes polyvinyl chloride, a plastic used in pipes and other construction materials. Competitors in the United States are cutting back production amid the credit crunch. Shintech is eyeing growth in Central and South America and exports to the Middle East. (Reporting by Mayumi Negishi)
