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AI-Driven Future: Shin-Etsu Products Driving the AI Era

AI社会をリードする信越化学製品
Contents

Products supporting the cutting edge of AI semiconductor manufacturing and use

Since the advent of generative AI, the real-world deployment of AI has accelerated across industries and society. With the development of physical AI, which uses AI to operate robots, automobiles, drones, and other devices, it is predicted that AI will increasingly become an infrastructure technology for industry and daily life going forward. On the other hand, challenges have emerged in scaling AI in the real-world, including growing electricity demand. As AI semiconductors are pushed to deliver ever-higher performance, their energy requirements continue to rise, driving a sharp increase in data center electricity use.

Against this backdrop, utilizing AI as social infrastructure will require further improvements in the AI chip performance efficiency, reductions in data center power consumption, greater efficiency in communications and enhanced energy savings across application areas such as automobiles and robotics.

The Shin-Etsu Group not only holds the world's leading market share in silicon wafers (single-crystal silicon), which serve as the substrates for all AI semiconductors, but also supplies materials necessary for manufacturing processes such as semiconductor circuit patterning and molding materials to protect chips. We are also engaged in the development and manufacture of a wide range of materials that contribute to creating an environment needed to maximize AI performance, including materials for cooling semiconductor chips and servers, building systems for storage and optical communications. Through this diverse product portfolio, we contribute not only to various technological innovations in AI semiconductors, but also to energy savings and the efficient use of resources in AI deployment environments, including data centers.

The Shin-Etsu Group's major AI-related products
Cloud, Data Centers
Cloud, Data Centers
Semiconductor Devices

Semiconductor Devices

e.g.) Silicon Wafers, Photoresist etc.

Optical Components

Synthetic quartz preform for optical fiber

Material for LED

SOI wafer

Quartz for optics

Optical isolator, faraday rotator

Hybrid wafer

Immersion Cooling

Silicone fluid★

HDD

Rare earth magnet

PG/PBN Heater

Photoresist

★

AI-Driven Future #01 Immersion Cooling Interview page
Semiconductor Devices
Semiconductor Devices

Silicon Wafers

Wafer Cases

Thermal interface materials★

Synthetic quartz photomask substrates

Silane Coupling Agents

Silane gas

Photoresist

epoxy encapsulant material

Hybrid wafer

Photomask blanks

Low dielectric material

CPO materials

Pellicles

Substrate Processing equipment

Ultra High Speed Mounter

TBDB materials

Quartz glass products, Materials for quartz glass products

★

AI-Driven Future #02 Thermal interface materials Interview page
Edge Devices
Edge Devices
Drones

Sealing materials

Thermal interface materials★

Anode material for lithium ion batteries

IoT Devices

Semiconductor Devices

e.g.) Silicon Wafers, Photoresist etc.

Industrial Robots

Light emitting device for 3D sensors

Rare earth magnet

Humanoid Robots

Rare earth magnet

Anode material for lithium ion batteries

EVs

Rare earth magnet

Anode material for lithium ion batteries

Power Supply・Cables
Power Supply

QST™substrate★

Cables

Synthetic quartz preform for optical fiber

PVC for cable coating

★

AI-Driven Future #03 QST™substrate Interview page

Accelerating the evolution of AI through the development and innovation of diverse materials

To improve the data processing capabilities of AI semiconductors, the process node has been reduced to a few nanometers*1 in the cutting edge devices. In terms of memory, new technologies continue to emerge, including HBM*2, which stacks multiple layers of DRAM*3. The Shin-Etsu Group contributes to improving the efficiency of AI semiconductors by providing the highest quality silicon wafers, as well as a wide range of materials to meet the advanced needs of semiconductor manufacturing processes, including high-purity deposition gases essential for circuit formation, photoresists necessary for circuit pattern formation, photomask blanks that serve as circuit pattern masters, pellicles that act as dustproofing films, and TBDB materials indispensable for the manufacturing of advanced semiconductors. In addition, we further contribute to improving the efficiency of AI semiconductors through the development of new materials. As increasing chip power consumption makes heat dissipation ever more critical, we provide effective thermal management solutions through silicone-based thermal interface material (TIM)*4.

Nevertheless, the power consumption for cooling in data centers is said to have already reached about 40% of the facility's total power consumption. As data centers continue to handle ever-larger volumes of data at higher speed, there is a growing demand for more effective cooling systems, and the adoption of cooling systems using highly electrically insulating liquids (immersion cooling) is beginning to gain momentum. Shin-Etsu Chemical is promoting the practical deployment of an immersion cooling system using silicone fluid with low environmental impact. This non-fluorine-based (non-PFAS*5) silicone fluid is highly stable and suitable for long-term use. The technology contributes to making data centers more energy-efficient while helping to conserve resources.

In the field of power semiconductors, which are essential for controlling power supply, we are working to develop wafers optimized for the growth of gallium nitride (GaN), which is attracting attention as a key next-generation material. Through these efforts, the Company aims to help address the challenge of significantly reducing the power consumption at data centers.

*11 Nanometer:
One millionth of a millimeter

*2HBM (High Bandwidth Memory):
A type of semiconductor memory that consists of multiple DRAM chips stacked on top of each other, enabling high-speed processing of massive amounts of data.

*3DRAM (Dynamic Random Access Memory):
A type of semiconductor memory commonly used as the main memory in PCs and smartphones.

*4TIM (Thermal Interface Material):
A material that fills the gap between heat-generating components such as AI chips and heat dissipation components such as heat sinks, effectively dissipating heat.

*5PFAS:
Collective term for perfluoroalkyl compounds and polyfluoroalkyl compounds.

Advancing into the next generation through integration of manufacturing, sales, and R&D

Today, driven by advances in AI semiconductors, development and proof-of-concept validation are progressing in optoelectronic integration, a next-generation technology that aims to achieve faster data processing and lower power consumption with the goal of extending the domain of optical signal processing. Shin-Etsu Chemical stably supplies high-quality SOI wafers*, which are expected to be used in such next-generation technologies. In addition, we are advancing the development of optical fiber preforms that deliver the properties required for next-generation platforms, as well as materials for optical modulators, which are key components in optoelectronic integration. The Shin-Etsu Group integrates manufacturing, sales, and R&D to ensure that it stays ahead of changes in social and market needs. We will continue to contribute to the realization of a sustainable society through the stable supply of products that support a wide range of industries and everyday life, including the field of AI.

*SOI (Silicon on Insulator):
A composite wafer in which a thin film of silicon is bonded onto an insulating layer on a silicon substrate.

#01 Immersion Cooling The superior properties of
immersion cooling silicone
contribute to energy and
resource conservation in
data centers Read the interview S.I., Fluid Group, Sales and Marketing Department I ,
Silicone Division S.F., 1st Development Department,
Silicone-Electronics Materials Research Center

Cooling the server by fully submerging it

S.I.:
Traditionally, data centers have relied on air conditioning systems to cool the interior of the building. However, as data processing on servers increases in volume and speed, the amount of heat generated by the servers also increases, making it a major challenge to efficiently dissipate this heat. One solution currently under development is an immersion cooling system that cools the server directly by submerging it in liquid. Silicone fluid is a strong candidate for the cooling fluid used in such a system.
S.F.:
In addition to silicone fluid, there are other candidate cooling fluids, including petroleum-based and fluorine-based fluids. However, silicone fluid has many advantages, including outstanding stability and resistance to deterioration, being PFAS-free with zero GWP (Global Warming Potential) and ODP (Ozone Layer Depletion Potential), a high flash point, excellent insulation, and, of course is so safe that it is also used in cosmetics.
S.I.:
That's why we emphasize the advantages of silicone fluid to customers interested in immersion cooling. However, there are many stakeholders involved, including data-center operators, server manufacturers, their component suppliers, and manufacturers of immersion cooling systems, and even considering safety alone, standards and approaches vary by country and region. As a result, there is a wide range of priorities when it comes to selecting a cooling fluid. We are therefore gathering information from a wide range of sources, including our overseas network, and the two of us are working together to figure out such priorities.
S.I.
S.F.:
The Shin-Etsu Group already offers a wide lineup of silicone fluids. In addition to those existing products, we need to develop new, customized products tailored to customer requirements. Customers are still searching for a standard for immersion cooling fluids. Since customer requirements vary widely, we want to proactively propose a standard and assemble a comprehensive lineup of immersion cooling fluids.

Advantages of being able to tailor characteristics to customer requirements

S.I.:
As communications technology advances from 5G to 6G, the fluid used for immersion cooling also needs to have electrical properties that minimize electrical energy loss to maximize the communication speed. Silicone fluid has excellent insulating properties and safety — so much so that it is used as insulating fluid in the transformers of Japan’s Shinkansen bullet trains — and is a highly reliable product that exhibits stable performance over a long period of time.
S.F.:
Another important electrical property is a low dielectric constant. A low dielectric constant of the cooling fluid results in a smaller capacitance, making it less likely for electricity to accumulate and thus providing stable insulation. Keeping it low is also an important factor in reducing electrical failures in the servers. Silicone fluid has the advantage that its dielectric constant can be controlled by changing its chemical structure, and we actively communicate that fact to our customers. However, the pace of technological innovation is fast in the AI world, and this is driving customer requirements to higher and higher levels. Accelerating our development to keep up with this pace is a major challenge for us. Therefore, in recent years, we have been trying to accelerate development by incorporating not only experimental materials research but also computer-assisted modeling approaches.
S.I.:
Currently, there is no established standard for fluids for immersion cooling, so we believe it's important to work together with our customers to hone the advantages of silicone fluid and build up our track record, thereby creating a trend where silicone fluid is the go-to choice for immersion cooling.
S.F.:
Indeed, the excellent stability of silicone fluid is a significant advantage when used as an fluid for immersion cooling: since it does not show any deterioration such as discoloration or increased viscosity, it can last for a long period of time without needing to be replaced. It also has the advantages of being colorless, transparent, and odorless, making it easy to visually monitor the server immersed in the liquid. Above all, Shin-Etsu Chemical's silicone fluid has a reputation for high quality and stable supply, so this is also a selling point for customers.
S.F.

A future in which we can contribute to local communities and families

S.I.:
Immersion cooling systems work by absorbing heat from servers into the silicone (or other) fluid, sending the fluid to a heat exchanger where it is cooled by water, and then re-using it again for immersion cooling. In the future, we hope to make effective use of the hot water from the heat exchanger for purposes such as local heating. What if heat from a data center could be used for a traditional community bathhouse (spa)? I think this would be welcomed by local residents, contribute to the community, and help create a more eco-friendly society.
S.F.:
One can imagine a future in which servers are placed underneath each home and their heat converted into electrical energy for the home. A future society where silicone fluid contributes to energy conservation and decarbonization in the underfloor spaces of homes is not just a dream. In that case, immersion cooling would become a major application for silicone fluid. I want to lead the development of fluid for immersion cooling to help bring about that kind of future.
#02 Thermal Interface
Materials Silicone heat-dissipation
materials that reduce
environmental impact
and
support the stable
operation of AI Read the interview K.T., Senior Researcher,
2nd Development Department,
Silicone-Electronics Research Center S.A., Product Development Group,
Sales and Marketing Department Ⅲ,
Silicone Division

Heat dissipation materials are essential for the stable operation of AI

S.A.:
With the emergence and widespread adoption of generative AI, AI has become a much more familiar part of our daily lives. In the future, the use of AI chips will spread beyond just servers lined up in data centers to a wide range of fields and applications including self-driving cars, autonomous robots, and drones. As the capacity of AI chips increases and the rate at which they process data accelerates, the amount of heat they generate increases as well. Letting that heat dissipate is essential for the AI chip to function to its full potential, no matter what environment it is being used in. This leads to ever more stringent requirements for the thermal interface materials (TIMs) that we are working on.
K.T.:
To illustrate how important heat dissipation is, I once tried starting my own PC without any heat dissipation materials, and it wouldn't boot at all. Even if it boots up, there is a risk of it catching fire if it continues to overheat. This illustrates how big a threat of chip-generated heat is to computers and servers. There is a cooling mechanism around the chip, but if air gets into the contact surface between the chip and the cooling mechanism, heat dissipation is impaired. TIM serves to fill this gap and efficiently transfer heat.
S.A.

One of silicone's advantages is the high degree of freedom it brings to product design

K.T.:
TIM is a composite material consisting of a base polymer and a filler. Other materials besides silicone are also available as options for the base polymer. However, silicone has two advantages. One advantage is its excellent stability, including weather resistance, heat resistance, and cold resistance. Another advantage is that silicone can be customized to meet the customer's specific needs. That's because of its chemical structure, which features a main chain* of silicon and oxygen that can bond with a variety of organic groups that can be selected as needed. This enables a high degree of product design flexibility and the possibility of custom-made products. To take advantage of this, first and foremost, it's crucial to accurately understand the customer's requirements so that we can then proceed quickly with development.
S.A.:
As a result of the rapid growth of the AI market and the rapid increase in demand for heat dissipating materials, more new manufacturers are entering the market and competition is intensifying. In this environment, Shin-Etsu Chemical already has more than 30 years of manufacturing experience in silicone heat-dissipating materials and can leverage that expertise to meet customer needs. To make the most of that advantage, I, as the sales representative, and K.T., as the R&D representative, often visit customers together. Many of our customers are located overseas and visiting them together in person allows us to accurately understand their technical requirements and challenges then and there, which helps to speed up development. In an increasingly competitive environment, development speed is becoming more and more important.
K.T.

Contributing to curbing ever-increasing power consumption

S.A.:
The performance of the TIM directly impacts the cooling efficiency of the equipment in which it is used. If performance is poor, heat won't be dissipated effectively, and a lot of power will be used for cooling the entire server. Therefore, designing and providing heat dissipation materials that are suited to the environment in which the chips are used contributes to reducing environmental impact, including reducing power consumption in data centers.
K.T.:
In recent years, as the functionality of AI chips has grown more sophisticated, the chips have not only become more complex in shape, but their size is growing at the same time as their substrates are getting thinner, making it increasingly difficult to meet customer requirements. In addition to the main circuit, the AI chip is connected to HBM (multi-layer high-bandwidth memory circuitry) and other components. As a result, the heat generation is not uniform, and the warping and deformation that occur during chip operation are also not uniform. The TIM needs to keep up with those changes in the chip. Furthermore, if the chip's design changes and the heat-generating part shifts by a few millimeters from its original position, the TIM will not be able to adequately dissipate heat unless it is adjusted accordingly. To overcome such challenges, we must constantly keep up with the latest information on the AI chips themselves. We also ask our sales representatives to gather information on that topic, and we communicate frequently in person.
S.A.:
AI is now becoming a part of our daily lives, and I feel proud knowing that the products we create are playing a role in that. We pride ourselves on providing high-quality products, and we will continue to strive to ensure that they can be used in more and more diverse fields.
K.T.:
Recently, we have also been using AI in our own domain of R&D to accelerate the pace of development. Imagining how the resulting TIM will further contribute to improving the performance of AI chips in a virtuous cycle makes the work even more rewarding.

*Main chain
The core silicone backbone formed by alternating silicon and oxygen atoms, known as the siloxane bond. A key feature of silicone is that bonding various organic groups to its main chain allows it to be given a wide range of properties.

#03 QST™substrate Developing next-generation
power semiconductors that
significantly reduce data
center power demand Read the interview M.Y., Manager, Shin-Etsu Chemical GaN Commercializing Unit

Establishing the fundamental technology for QST™ substrate for GaN epitaxial growth

As AI becomes widespread, reducing the power consumption of the AI data centers that support it has become a major challenge. According to estimates by the International Energy Agency (IEA), worldwide electric power demand for data centers reached 415 terawatt-hours in 2024 and is expected to reach 945 terawatt-hours by 2030, exceeding the total electricity consumption of Japan as a whole. To curb this enormous demand for electricity, innovation in power semiconductors is urgently needed. Power semiconductors are devices that perform roles such as converting the high-voltage alternating current supplied to data centers into direct current, converting voltage levels, and controlling frequency. They are used in many places throughout the data center, from its power receiving infrastructure to the power supply for the servers that serve as its brain. There are therefore high expectations for the improved performance of power semiconductors to solve challenges such as reducing the electrical energy lost as heat.

Shin-Etsu Chemical is focusing on gallium nitride (GaN) as a next-generation material for these power semiconductors. In 2019, we signed a licensing agreement with Qromis, Inc. in the United States, and began full-scale development of QST™* substrate for GaN epitaxial growth. GaN is expected to offer excellent properties, such as reducing electrical energy and contributing to the miniaturization of devices, but until now it has been difficult to create substrates that can fully realize these characteristics. To overcome this challenge, we incorporated our own proprietary technologies to suppress the occurrence of defects, enabled the manufacture of large-diameter wafers, work to enable the use of silicon carbide (SiC) and GaN as "higher-performance seed crystals" for power semiconductors. We have even made it possible to recycle the base substrate. As a result, power semiconductors using this technology can withstand high-voltage loads of up to 1200V, making them usable in the power receiving infrastructure of data centers, while also reducing energy loss by more than 80% compared to conventional devices. Furthermore, by enabling the miniaturization of power supply components and reducing the need for heat dissipation, power consumption for cooling and other related processes can be reduced, dramatically lowering the overall power demand of the AI data center. Moreover, recycling can reduce the electricity required for conventional crystal substrate manufacturing and lower the consumption of gallium (Ga), one of the rare materials.

Partnerships with Group companies and customers

The foundational technologies for these next-generation power semiconductors are built on the technologies and expertise in compound semiconductor manufacturing that Shin Etsu Chemical has cultivated over many years. I myself have experience in the development and sales of compound semiconductors used in LEDs and other applications, and that experience has been helpful in the development of QST™ substrate. Furthermore, the cooperation of device manufacturers is essential for gathering information on customer needs and for technical verification. In this regard, our group company Shin-Etsu Handotai Co., Ltd. and our global network have been a great help. Since we are primarily a material manufacturer, we need to rely on device manufacturers and global R&D institutions to evaluate the performance of the devices incorporating our materials. We have also been conducting performance evaluations of the newly developed QST™ substrate with the cooperation of device manufacturers and research institutions that are our customers. After receiving positive feedback in 2025, we became convinced that even the large-diameter 300 mm wafers that were previously considered difficult could be commercialized.

We were this time able to make great use of our existing partnerships with our customers in the compound semiconductor field. When we spoke to OKI Electric, with whom we have had a relationship on compound semiconductors for LEDs, about recycling QST™ substrate that forms the base of GAN devices, we discovered that the company's CFB® technology could be utilized, and joint development is now underway for the real-world deployment of GaN devices. I believe that this recycling process will significantly reduce the energy and materials required for substrate manufacturing and will also allow us to make better use of valuable Ga resources by eliminating the need for GaN substrates.

Greater focus on real-world deployment

QST™ substrate has only just reached the stage where the fundamental technology is established, and there will still be many hurdles to overcome before they can be adopted as power devices worldwide. However, we have a foundation of overcoming obstacles through partnerships with our customers, and with the support from Shin-Etsu Group companies around the world, I am confident that we can clear these hurdles and deliver innovation.

*QST™
Abbreviation for Qromis Substrate Technology, a gallium nitride (GaN) technology patented by Qromis, Inc. in the United States. By incorporating its proprietary technologies, Shin-Etsu Chemical has further improved the properties of the original QST™ substrate—for example, by suppressing defects and cracking to enable larger-diameter substrates —and is now developing second- and third-generation substrates.

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