The 2013 market for semiconductor silicon wafers totaled $7.5B, down 16 percent from 2012, according to a new report from Techcet Group, “Silicon Wafers for Semiconductor Device Processing 2014, a Techcet Group Critical Materials Report.” The 2014 outlook is for one percent growth to $7.7B. The silicon wafer market is expected to grow to $8.7B by 2015, according to Techcet’s forecast. The current outlook is positive for 2H14 as compared with 1Q14, with growth anticipated in all wafer diameters and all major market segments.
Although shipments of silicon by area recovered after 2009, prices have not recovered to 2008 levels. If the demand projections hold, silicon producers will pursue price increases in 2015 for the first time since 2011.
Silicon wafer purchases represent the highest operating expense for many device manufacturers and as a result are a constant target for price reduction. With the continued concentration of the semiconductor manufacturing base to a few large players, silicon producers have little choice but to succumb to the price pressure. As a result, ASP for wafers has declined steadily since 2011 with -14 percent and -16 percent in 2012 and 2013 respectively. Over the same period, the silicon market has experienced a steady increase in silicon area shipped at a CAGR of 3-6 percent. While overall silicon shipments have been relatively flat since the 2010 recovery, the change from quarter to quarter can exceed 10 percent. We anticipate this volatility to smooth as supply tightens with the growth expected in 2015.
The top five silicon wafer producers account for roughly 90 percent of bulk wafers sales. Shin Etsu Handotai (S.E.H.) and SUMCO account for over 60 percent of volume and sales among the two of them at 32 percent and 29 percent respectively. Each of the silicon producers have sufficient capacity to meet current silicon demand and are poised for growth. Soitec dominates the SOI wafer market with 60 percent share, dwarfing the market share of others. Silicon on Insulator substrates will become more significant in the supply chain as semiconductor manufacturers adopt this substrate to combat the high costs and yield challenges of 28nm and FinFET device nodes.
Techcet Group, LLC specializes in technical trend analysis and market analysis for the semiconductor, silicon, PV and related electronics industries. The company has been responsible for producing the International Sematech Critical Material Reports since 2001.