According to CINNO Research industry information, Shin-Etsu Chemical Industry has successively released a number of new materials for the next-generation communication standard “5G”. From the end of 2019 to the beginning of this year, it has successively released new materials for high-frequency radio wave printed circuit boards and semiconductors. With the stagnant demand for general-purpose Electronic equipment and semiconductor materials, Shin-Etsu Chemical firmly grasps the 5G equipment that is expected to show high growth in the future market.

A quartz glass cloth developed by Shin-Etsu Chemical for 5G printed wiring boards. (Photo from: Nihon Keizai Shimbun)

According to the Japanese media Nihon Keizai Shimbun, the communication speed of 5G is 100 times that of the current 4G, so electronic materials that can give full play to the high-speed and large-capacity characteristics of 5G are required. Although Shin-Etsu Chemical’s existing products have also been applied to 5G so far, Shin-Etsu Chemical has developed materials specifically for 5G for the first time. Shin-Etsu Chemical has developed three products as materials that can be applied to printed wiring boards and base station antennas. Sample deliveries have already begun, with the goal of mass production in 2021.

One of the three products is “Quartz Glass Fiber Cloth” with quartz silk as raw material. It is widely believed that epoxy resins used in conventional printed wiring boards are difficult to maintain communication performance in a 5G environment. The quartz glass fiber cloth can meet the high-frequency requirements of 5G, control the loss of electrical signals, and effectively convey information.

In addition, in terms of 5G semiconductor wafers, Shin-Etsu Chemical has also developed a gallium nitride layer formed on the surface of the wafer. It plans to start shipping samples this year, and calls for applications in smartphones and other aspects.

Semiconductors with gallium nitride layers can reduce electrical losses to 1/6 or even lower than general silicon semiconductors. The leaked electricity is not converted into heat, thus also saving space for cooling. Helps save space within electronic equipment.

While many material manufacturers are suffering from a sluggish market and reduced revenue, Shin-Etsu Chemical, which specializes in high-margin high-performance materials, has relatively stable performance! According to Shin-Etsu Chemical’s forecast, the operating profit for the March 2020 period (April 2019-March 2020) will increase by 0.3% compared with the previous period to 405 billion yen (about 26.3 billion yuan), although the magnitude Small, but the income has maintained steady growth.

(Photo from: Nihon Keizai Shimbun)

The “Electronics, Functional Materials Division” and “Semiconductor Silicon Division”, which include the 5G materials developed this time, have particularly high profit margins. For the March 2019 period (April 2018-March 2019), the Group’s overall operating profit margin was 25%, compared to 35% for the Semiconductor Silicon Division and 30% for Electronics and Functional Materials. Focus on strategic products in these divisions to strengthen the foundation for business growth.

Among the materials used in electronic equipment and semiconductors, its peers, such as SUMCO, are also committed to developing products for 5G. In order to make the developed products profitable, Shin-Etsu Chemical needs to improve product functions, control prices through mass production, and expand sales systems.