Silicon wafer shortage starts in 2018

TECHCET CA, an advisory service firm providing electronic materials information, today announced that the silicon wafer supply for semiconductor device fabrication is forecasted to appreciably lag demand starting next year, and could remain in shortage through the year 2021 despite investments in China. Silicon wafer area demand is forecasted to steadily increase at a CAGR of ~3.1% over the 2016-2021 period to reach over 13,000 million square inches (MSI). Executives of silicon wafer suppliers have stated that average selling prices have remained too low to allow for investment in 300mm expansions, as detailed in a quarterly update to the TECHCET Critical Materials Report, “Silicon Wafers Market & Supply-Chain.”

The silicon wafer supply-chain is dominated by two suppliers–Shin-Etsu Handotai and SUMCO–combining to capture almost two-thirds of the global wafer market in 2016, and the top five representing over 92% of total revenues. The silicon wafer market is maturing as evidenced by recent mergers and acquisitions, the two most notable being the acquisition of SunEdison Semi by GlobalWafers (Taiwan) and the assumption of majority ownership of LG Siltron by SK Holdings (Korea).

“Over the last five years, the average selling price per square inch of semiconductor-grade silicon wafers has declined by about a third and more than a half from the 2007 level,” explained Michel Walden, lead author of the report and senior technology analyst with TECHCET. “However, current tightness in the supply-chain has led to greater stability and even price increases in some cases, all of which is likely needed for the long-term health of the wafer suppliers.”

Over the past few years, silicon suppliers decommissioned roughly 25% of the peak capacity for 200mm wafers. Of the remaining 200mm capacity, roughly 65% of the total demand is for epitaxial (epi) wafers, and a series of epi service companies have embraced this opportunity and provide a variety of layer configurations for their customers.

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4 thoughts on “Silicon wafer shortage starts in 2018

  1. Malcolm Penn

    Excuse me but the shortage is already here … It started in Q4 2016 and has been getting steadily worse throughout 2017!!!! What’s with this 2018 nonsense? So much for this model :-)

    Reply
  2. Mike Walden

    Thanks for your attention Malcolm. Don’t confuse tightness in supply with shortage… Also, it is very important to understand that this is very much a product level consideration. Certain types of wafers are in tighter supply than others.

    Reply
    1. Todd Slayton

      Today, silicon is in high demand and prices for most products (though not all) are already on their way up after many years of such comments. That said, I don’t believe anyone has missed starts. For 200mm and especially 300mm bulk silicon, that will turn into an actual shortage with continued growth as forecast.

      Reply
      1. Bill

        Just had 100mw of Boviet module commitments canceled along with many other module cancelations this year. This is only driving up costs when racking is built module specific and has to be started from scratch.

        Reply

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