Shin-Etsu to Raise Global Silicone Prices Over 10% Starting May 2026
According to Shin-Etsu Chemical, a global leader in silicone and semiconductor materials, the company announced on April 17 that it will increase prices for all silicone products worldwide by more than 10%, effective May 1, 2026. The exact adjustment will vary depending on product categories. This move marks another significant pricing action by a major Japanese chemical manufacturer amid escalating geopolitical tensions in the Middle East. On the same day, Mitsubishi Chemical also announced price hikes for ethylene oxide and five related derivative intermediates.
Shin-Etsu stated that the price increase is driven by three primary factors. First, ongoing tensions in the Middle East have pushed up crude oil and naphtha prices, significantly raising costs for downstream petrochemical derivatives. Second, energy costs required for manufacturing have continued to climb. Third, expenses related to containers, packaging materials, and logistics have risen simultaneously. The company noted that despite ongoing internal cost-control efforts, absorbing these increases has become increasingly difficult, necessitating price adjustments to ensure stable production and supply continuity.
From a supply chain perspective, silicone is a fundamental material with broad applications, ranging from thermal management materials in electronic components to additives in cosmetics and medical devices such as tubing. Shin-Etsu holds an estimated global market share of approximately 6.4% to 7.9% in the silicone sector, alongside major players such as Dow and Wacker Chemie. The latest price increase is expected to gradually impact cost structures across industries, from high-end electronics to consumer goods.
Notably, this adjustment is part of a broader series of pricing measures by Shin-Etsu. On April 20, the company also announced an increase of at least JPY 30 per kilogram for domestic polyvinyl chloride (PVC) resin prices, effective for shipments from May 11. This move is similarly linked to rising ethylene feedstock costs, driven in part by disruptions affecting the Strait of Hormuz.
In the semiconductor materials segment, price increases for silicon wafers have already been gaining momentum globally. Industry leaders including SUMCO and GlobalWafers, alongside Shin-Etsu, have previously indicated further price increases of 5% to 8% in the second half of the year. For 12-inch silicon wafers, average prices for polished wafers in the third quarter are expected to reach around USD 80, while epitaxial wafers may exceed USD 100. Meanwhile, 8-inch wafers, following a single-digit percentage increase in the second quarter, are projected to maintain a similar upward trend in the third quarter.
Industry analysts suggest that this wave of price increases is driven by two key factors. First, geopolitical tensions in the Middle East have elevated crude oil and naphtha prices, with electricity accounting for approximately 15% to 20% of wafer manufacturing costs—directly impacting production and transportation expenses. Second, sustained demand growth in AI and high-performance computing (HPC) is accelerating recovery in advanced process and advanced packaging segments, strengthening overall demand for silicon wafers. As these factors converge, the upward pricing trend in the global silicon wafer market is becoming increasingly well established.
