Silicon wafers are known to be an important part of the semiconductor industry and are required by every chipmaker regardless of what they manufacture. While electronic supply chain professionals are managing the increasing price of DRAM and extended lead times for discrete components, the more significant industry issue includes a shortage of wafers.
The process begins with tiny silicon crystals seeds placed in a crucible and cultivated into ingots. Then, specially designed machinery extends the ingots into rods and slices the rods into wafers, which are used as a substrate material to fabricate semiconductors. The process is highly challenging as it requires ultra-clean environments, advanced manufacture technology and special machinery. To compete in the wafer industry, a significant amount of capital and expertise is needed; therefore, smaller players do not last long. In the past 20 years, silicon wafer suppliers have consolidated from 20 in the 1990s to only five today.
On the opposite side of the spectrum, dimension miniaturization, increased chip capacity, price pressures and low margins have been the major challenges for silicon wafer suppliers over the past few decades. According to Sage Concepts, the average selling price of silicon wafers have dropped from $1.04 per square inch in 2009 to $0.76 per square inch in 2015. As a result, some vendors have decided against manufacturing at their full capacity to cut down the cost. Moreover, 25% of peak capacity for 200mm wafers have been decommissioned by silicon suppliers over the past few years.
A 200mm fab will produce several types of chips, ranging from 6-micron to 65nm. Some examples include MCUs, MEMS, MOSFETs, power management ICs and RF devices. The recent surge in different verticals using those chips, such as automotive, mobile, wireless, and IoT applications have resulted in a shortage of 200mm wafers. In the past few years, 200mm fab production has been declining as factories have begun switching to 300mm, creating short supply of 200mm fab equipment. However, the number of installed capacity of 200mm fabs is expected to increase to the level of 2006. By 2020, 200mm capacity is expected to reach approximately 5.7 million wafers per month.
For the global market, silicon wafer volume shipments have reached record levels for the fifth consecutive quarter, shipping 2,978 million square inches in Q2 2017. As the number is likely to increase, silicon wafer demand is forecasted to steadily increase at a CAGR of 3.1% over the 2016-2021 periods, to reach over 13,000 million square inches.
It is not clear when the supply of fab will catch up with the increasing demand. If the fab shortage continues, the shortage of electronic components is likely to worsen. In such a dynamic market, a reliable and trustworthy supply chain partner, such as Advanced MP Technology, will provide technology manufactures peace of mind for all component sourcing needs. Advanced MP Technology, with over 39 years of industry experience, has established alignments with the global suppliers of highly demanded components to fulfill customer needs during the electronic component shortage.