Blog

Decline in Global Silicon Demand

As the end of 2013 approaches, the semiconductor industry will begin to experience a slowing in the demand for silicones. This material is expected to ship a total of 2.47 million square inches in the final quarter, a significant decrease from the 2.54 million shipped in the third quarter. While it is normal for the shipment of silicones at the end of the year to gradually decline, this year in particular is also experiencing slowing due to missed projections along with economic inertia in the marketplace.

The following is a list of some of the actions that contributed to the issues in the current market for silicones:

  • Silicone suppliers overproduced the material in the first half of the year, creating more supply than was demanded by customers.
  • In addition to overproduction, many companies actually bought more semiconductor chips than they needed as they overestimated their sales numbers. During the year, these companies made adjustments, producing fewer products, and stockpiling their unused semiconductor industry materials.
  • Economic uncertainty is another contributing factor. Silicone suppliers are hesitant to produce more chips at the end of the year unless they actually have orders placed for their materials. This, however, is unlikely due to the leftover stockpiles of chips that many companies have in their possession.

While the semiconductor industry has experienced problems toward the end of the year, such as those listed above, the silicon market as a whole has actually had a very strong year. Prior to the decline, shipments of silicones were high, leading to silicon growth of approximately 3.5 percent, which is much higher than the .8 percent growth seen in the year 2012. In addition to high growth in the first half of the year, many suppliers made adjustments in the third quarter, reducing manufacturing rates of silicone to avoid unnecessary costs.

During this year, chipmakers have also been working to transition to 12-inch wafer manufacturing. In the near future, the demand for 12-inch wafers is predicted to grow due to the number of wireless applications available to consumers in the marketplace. In addition to this transition in wafer manufacturing, advanced lithography is being developed to include 18-inch manufacturing or 450nm wafers. So while numbers for silicones are declining now, it is only temporary, and will strengthen in the New Year and beyond.

As these exciting transitions take place, Shin-Etsu MicroSi, a respected semiconductor industry supplier, will continue to monitor the latest developments to ensure that we are delivering our customers with the most technologically advanced, high performance products available. Our semiconductor expertise has allowed us to create supplies for such tasks as lithography, packaging, wafer manufacturing and more. To learn about our specialty products and services, call ShinEtsu Phoenix at (480) 893-8898 or contact us online.