Semiconductor Materials: How Well Do You Understand the Trends?


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Semiconductor Materials: How Well Do You Understand the Trends?

by Lara Chamness

Did you know that the global semiconductor materials market grew 18% in 2004 and is forecasted to grow 7% in 2005 and over 6% in 2006? You would if you subscribed to quarterly Material Market Data Subscription (MMDS) service by SEMI®.

With the semiconductor device market reaching record revenues of $213 billion1, 2004 record revenue levels for semiconductor materials were experienced as well. Growth was seen in both the wafer fabrication materials and packaging sectors with increases of 19% or $16.9 billion and 18% or $11.2 billion respectively. As semiconductor content in electronics increases, this trend is expected to continue creating significant opportunities in the materials sector.

Regional Trends

Japan continues to dominate worldwide semiconductor materials consumption at 29%; but in 2004 Taiwan surpassed North America, bumping North America down to the third largest consumer of semiconductor materials by value. Taiwan is expected to remain in the number two position for the immediate future. Below is the current forecast for 2005. 2005 data will be finalized as part of the quarterly MMDS update after the new year.

Worldwide Semiconductor Materials Market by Region

China

The semiconductor materials market exhibited the largest growth in the China region during 2004 at 33%. This growth was driven primarily by consumption of packaging materials, which accounted for over 65% or $781 million of the semiconductor materials market in the region. With much of the traditional packaging moving to China this trend is expected to continue. The China fabrication materials market was $391 million in 2004 and will grow substantially as 200 mm and 300 mm fabs in the region increase capacity.

Wafer Fabrication Materials

Fab materials currently make up about 60% of the value of the total worldwide semiconductor materials market, with the majority of revenues coming from silicon sales. Taken together, silicon and photo masks account for 60% of the wafer fabrication materials market. With the exception of the gas market, all segments experienced double digit growth in 2004. In 2005 and 2006, overall fab materials growth is expected to slow to around 5-6% before increasing in 2007 to over 9%.

With 300 mm silicon wafers expected to represent over 25% of silicon volume shipped by 2006, the use of photoresists specifically, advanced photoresists, are expected to increase significantly driving photoresist growth rates close to 20% by 2007.

Packaging Materials

As mentioned earlier, the packaging materials sector also experienced very strong growth of approximately 18% in 2004. One of the most dramatic changes in semiconductor materials is the emergence of the packaging materials market. Packaging materials represented about 33% of the total semiconductor materials market by revenue in 1998 and now account for approximately 40% of the semiconductor materials market in 2004. This shift is due to an increased use of laminate substrates and advanced polymeric materials for ball grid array, chip scale and flip chip packaging. Both of these materials sectors are forecasted to experience stronger growth in the coming years as electronics portability and functionality drive more demanding packaging requirements.

Much like wafer fabrication materials, semiconductor packaging materials are also expected to exhibit slower growth rates during the next three years within the range of 7% to 8% and to reach $14 billion by 2007. If laminate substrates are removed from the forecast, the growth rate drops to 3% to 4% annually.

Conclusion

Knowledge of semiconductor material trends is essential in today’s challenging business environment. Several key trends, such as Taiwan’s emergence as the second largest consumer of semiconductor materials, China’s growth, especially in packaging and the tremendous growth of photo resists and laminate substrates, will no doubt have a dramatic impact on the semiconductor materials landscape in the coming years. How well are you prepared?

All of the information in this article was derived from the Materials Market Data Subscription, produced by Semiconductor Equipment Materials International (SEMI). In developing this report, supplier data is collected from semiconductor materials providers throughout the world.

TO ORDER YOUR COPY of Materials Market Data Subscription, please contact Lara Chamness, senior market analyst via email at lchamness@semi.org, or telephone
1.408.943.7982. You can also visit www.semi.org and select “Store” from the horizontal menu to find the Materials Market Data Subscription.

1 Semiconductor Industry Association, Semiconductor Industry Blue Book Report December 2004.