Shin-Etsu Chemical's shares surged as much as 8.3% in Tokyo trading after reports emerged of a massive $3.4 billion investment to expand polyvinyl chloride (PVC) production in the United States. The Japanese chemicals giant plans to boost output of raw materials used in PVC resin, anticipating market recovery as Chinese oversupply eases, according to Nikkei.

The investment will be executed through Shintech, Shin-Etsu's U.S. subsidiary, at a Louisiana industrial site. The company will construct a new ethylene production plant and an electrolysis unit for chlorine production - key inputs in PVC manufacturing. These facilities are scheduled for completion by the end of 2030.

Beyond raw materials, Shin-Etsu is also considering expanding finished PVC product manufacturing to meet growing demand. The strategic move positions the company to capitalize on expected market tightening while reducing reliance on Asian supply chains amid ongoing trade tensions.