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Shin-Etsu to invest $694 million to boost silicone output for EVs

Shin-Etsu Chemical will invest in plants in Gunma and Fukui prefectures

Shin-Etsu to invest $694 million to boost silicone output for  Electric vehicles

Shin-Etsu Chemical plans to increase its production of high-performance silicone used in electric vehicles to solidify its position in a market that is expected to grow with the shift to a low-carbon economy, Nikkei has learned.

The Japanese company’s output of silicone thermal interface materials could double by 2025. The material is formed into sheets and placed around semiconductors and batteries to help them release heat. Without it, batteries and chips can overheat, hurting their performance and reducing the range of EVs, for instance.

Shin-Etsu Chemical will invest in plants in Gunma and Fukui prefectures, where various materials are made, including those used in construction and cosmetics. The investment will focus on expanding production lines for EV materials and will raise output by 20% to 100%. The amount of investment is expected to total 80 billion yen ($694 million) through 2025.

The market for silicone, worth $14 billion worldwide in 2020, according to Shin-Etsu Chemical, is expected to grow 3% to 4% annually over the next five years.

Shin-Etsu Chemical is Japan’s largest supplier of silicone and accounts for 15% of the global total.

Dow Chemical of the U.S. has the biggest share, with 35%. The Japanese company hopes to gain market share by investing more aggressively.

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