UPDATE 1-Japan's Shin-Etsu 9-mth profit up 27%, keeps outlook

(Adds share price)

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.

Despite expectations that the world's biggest maker of silicon wafers will post record earnings in the year to March, its share price has been hit by fears that the sluggish semiconductor and U.S. housing markets would hurt the wafer and construction materials maker.

Price falls hurting 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.

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 at 187 billion yen, compared with a market consensus of 189.6 billion yen by 21 analysts.

It earned a net profit of 143.43 billion yen in the nine months to Dec. 31, up from 113.20 billion yen a year earlier, beating a consensus estimate of 138 billion yen.

Following the announcement, shares of Shin-Etsu were up 4.2 percent at 5,900 yen as of 0417 GMT, while Sumco climbed 3 percent to 2,370 yen.

Silicon wafer makers have benefited from a shift by microchip makers to cost-efficient 300mm wafers, making up for declining demand and prices for smaller 200mm wafers.

Shares of Shin-Etsu have fallen about 35 percent since hitting a record high in July on concern 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. (Reporting by Mayumi Negishi; Editing by Hugh Lawson)