Silicon demand rebounds in 2010, led by 300mm wafers

EL SEGUNDO, USA: Following a weak 2009, global demand for silicon used in semiconductor manufacturing is expected to rebound robustly in 2010, led by shipments of cutting-edge 300mm wafers, according to iSuppli Corp.

Total square inches of silicon shipped for semiconductor manufacturing are set to rise to 8.2 billion in 2010, up 17.4 percent from 7 billion in 2009. This represents a major turnaround from 2009, when dismal economic conditions caused silicon demand to decline by 11.1 percent.

However, demand for silicon in 300mm wafers will increase to 4.5 billion in 2010, up 27.2 percent from 3.6 billion in 2009, representing the fastest-growing segment of the market. In contrast, 150mm wafer silicon demand will grow by only 9.6 percent in 2010 and 200mm wafers will experience a 7 percent increase.

“The key to sustainable growth in the semiconductor market can be summed up in one word: innovation,” said Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli. “In the semiconductor manufacturing segment, a major element in achieving innovation is the increasing adoption of 300mm wafers, which offer greater economies of scale and thus greater efficiency and lower cost than smaller wafer sizes.”

iSuppli forecasts that 300mm wafers will reach 6.1 billion total square inches of silicon manufactured by 2013, rising at a CAGR of 12.4 percent from 3.6 billion total square inches in 2008. In contrast, 200mm wafers in 2013 will shrink to 2.7 billion total square inches of silicon manufactured, with a negative CAGR of 2 percent, down from 3.0 billion total square inches of silicon manufactured in 2008.

The figure presents iSuppli’s forecast of global silicon demand by wafer size in terms of square inches.Source: iSuppli, April 2010.

Several things tend to occur in the semiconductor manufacturing world after a recession—and the post-2009 downturn period will be no different.

For instance, after the recession of 2001, the semiconductor industry saw the beginning of three major technical transitions: the reduction in lithography to 0.13-micron, the incorporation of a new metallization scheme and the start of the transition to 300mm wafers. At that time, it was clear that 6-inch wafers were no longer in demand as manufacturers shifted to the most cost-effective 200mm and 300mm sizes.

In a more recent example, the semiconductor industry after the recession of 2009 clearly embraced 300mm manufacturing by transitioning 50 percent of all manufacturing to these large wafers. Just as 150mm wafers lost favor following the 2001 recession, iSuppli believes that 200mm wafers will go out of style during the post-2009 downturn period.

The aggressive transition to 300mm wafers will continue to put pressure on silicon manufacturers, resulting from companies not having recouped their investment in 200mm tooling.

Source: iSuppli, April 2010.