The Silicon Reclaim Wafer Market: Modest Revenue Recovery through 2011


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The Silicon Reclaim Wafer Market: Modest Revenue Recovery through 2011

By Lara Chamness, senior market analyst, SEMI Industry Research and Statistics

Reclaim wafer suppliers faced many challenges in 2009. Between idled fab tools due to low fab utilization and intense cost reduction efforts within fabs, fab operators’ need for test (virgin or reclaimed) wafers diminished significantly in the first half of 2009. In an effort to fill their own lines, many wafer reclaim suppliers offered significant price concessions. After contracting a painful 82 percent in 2009 to total $287 million, the worldwide reclaim wafer market is forecasted to reach $303 million and $312 million in 2010 and 2011, respectively.

During 2007 and the first half of 2008, sales from scrap silicon wafers to the rapidly expanding solar market helped to subsidize many reclaim wafer suppliers, allowing them to offer very competitive pricing on reclaimed wafers. With the collapse of the scrap silicon market due to the recession and ample supply coming on-line for solar, reclaimers are now without this revenue stream and are committed to very low prices for their services or risk losing business to a competitor if they try to increase pricing. Five reclaim suppliers were not able to survive in such difficult conditions and Isonics was acquired by Wafer Reclaim Service.

While 300 mm reclaim wafers offer the best growth potential for suppliers, there is an oversupply of 300 mm reclaim capacity, which spurred intense price erosion beginning in the fourth quarter of 2008. As a result, aggregate average selling price for 300 mm wafers declined about 40 percent in 2009 although pricing varies significantly by region and volume.

Aggregate Average Selling Price Trends of 300 mm Reclaim Wafers

 

2006

2007

2008

2009E

Price per 300 mm wafer

$49

$44

$40

$24

% Change Year/Year

-12%

-10%

-9%

-40%

Source: SEMI Silicon Reclaim Wafer Characterization Report, February 2010

Coinciding with this intense downward price pressure was the gain in market share by domestic suppliers. Historically, wafer reclaim suppliers based in Japan dominated the worldwide wafer reclaim market. However, the tide is starting to turn: in 2007, suppliers in Japan claimed 67 percent of the worldwide wafer reclaim market while in 2009, that share shrunk to 57 percent. Japan is the sole region which is served entirely by local suppliers. Suppliers in Asia Pacific, specifically in Taiwan, significantly increased their coverage of their domestic market in 2009. Suppliers in North America also made gains into the North American market in 2009.

The Japan region is the largest reclaim market in terms of both revenue and numbers of wafers and it is expected to remain so for the duration of this forecast. Taiwan is the second largest market region for the reclaim market, followed by North America. It is expected that that suppliers outside of Japan will continue to gain share in their respective local markets in the future.

A recently SEMI published report, Silicon Reclaim Wafer Characterization Summary, provides details on the 2009 silicon wafer reclaim market for the semiconductor market including a discussion on aggregate pricing trends, and provides a forecast to 2011. Seven regions of the world are covered in this report including North America, Japan, Europe, Korea, Taiwan, China, and Rest of World (ROW). Market estimates for reclaim wafers are for semiconductor applications including equipment and IC manufacturing markets.

Please click here for additional information about this new report as well as a list of tables and figures.

May 4, 2010