July 21, 2009 / 5:44 PM / 10 years ago

Shin-Etsu unit seeks price hike for 300mm silicon wafers

July 22 (Reuters) - Shin-Etsu Handotai Co, the world’s largest manufacturer of semiconductor silicon wafers used in making microchips, has started talks with chipmakers to raise the price of its 300 millimetre wafers by 30 percent to 40 percent, the Nikkei said on Tuesday.

The newspaper said Shin-Etsu Handotai, which holds about 35 percent share in the global market for silicon wafers, wants to raise prices in tandem with a chip-market recovery.

Sumco Corp (3436.T) and other rival companies may follow suit, the paper said. Shin-Etsu Handotai, a unit of Shin-Etsu Chemical Co (4063.T), aims to improve profitability through its first price increase in three years, the newspaper reported.

The Nikkei, however, said the dozen or so domestic and foreign chipmakers that Shin-Etsu Handotai is in talks with, may oppose the hike, as their own earnings are slumping.

Prices of 300 mm wafers have fallen 40 percent as demand has plunged since last autumn. The wafers cost about 10,000 yen to 15,000 yen a unit, down from around 20,000 yen last summer, the daily said.

Demand for silicon wafers had dropped from 3 million units a month last summer to about 1.3 million units early this year, before climbing back to 2.6 million units at present, the Nikkei said. (Reporting by Ashutosh Joshi in Bangalore; Editing by Unnikrishnan Nair)

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