Upturn Seen For Silicon Wafer Market

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SemiEngineering

November 19, 2020

After a downturn in 2019, the silicon wafer market is expected to rebound in 2020.

2021 looks even better for silicon wafers. Silicon wafers are a fundamental part of the semiconductor business. Every chipmaker needs to buy them in one size or another. Silicon wafer vendors produce and sell bare or raw silicon wafers to chipmakers, who in turn process them into chips.

The silicon wafer market is a cyclical industry. In 2019, the market fell by 6.9% amid a downturn in the memory business, according to SEMI.

In 2020, though, global silicon wafer shipments are set to rebound and increase by 2.4% year-over-year, according to SEMI. “Silicon wafer shipments are recovering this year despite pressure from geopolitical tensions, the shifting global semiconductor supply chain and the COVID-19 pandemic,” said Clark Tseng, director of Industry Research and Statistics at SEMI. “With the pandemic accelerating digitization to transform businesses and their delivery of services worldwide, we expect continued growth over the next two years.”

Suppliers of silicon wafers make different types of wafers based on the application. The main wafer product types include epitaxial, polished, SOI, among others.

Used for logic devices, epitaxial wafers consist of a monocrystalline silicon layer grown on the substrate. Polished wafers are used for memory. These require ultrapure substrates with flat and clean surfaces.

In 2020, the supply and demand situation for 300mm wafers can be divided into epi and polished wafers. “Demand for 300mm epi wafers have been very strong lately and is expected to continue into 2021. Therefore, the supply and demand are quite tight for 300mm epi wafers as demand continues to rise while supply growth is limited,” said Sungho Yoon, senior research manager at SEMI. “However, in terms of 300mm polished wafers, supply and demand remains loose due to relatively soft memory demand.”

Pricing is a mixed picture. “Except for 300mm epi wafers, the blended ASP is trending down this year even though there are LTAs (long-term agreements) in place,” Yoon said. “However, the epi wafer price for 7nm and below were very stable in 1H2020 even during the pandemic.”

What will the 300mm silicon wafer market look like in 2021? Compared to 2020, the market is expected to increase by 5% next year, according to SEMI.

“The 300mm silicon wafer market in 2021 really depends on when the memory market will recover,” Yoon said. “The 300mm polished wafer price for the first half of 2021 is close to finalizing now. If the memory market rebounds starting in 2Q21, we might see a price increase in 2H21. As for 300mm epi wafers, demand is expected to remain solid next year. As a result, the epi wafer price is expected to trend up in 2021.”

Meanwhile, the 200mm market is a mixed bag. Today, 200mm foundry capacity is basically sold out. “200mm wafer demand shall improve in 2021. However, the 200mm wafer shipments would still be lower than the level of 2018,” Yoon added.