By Lara Chamness
Given current macroeconomic headwinds, this year is proving to be challenging to forecast. Most analysts recently downgraded their semiconductor revenue forecasts to flat or low-single digits, down from the more optimistic forecasts of 4% to 6% growth presented earlier in the year.
SEMI believes that the semiconductor materials will trend with the device market. As such, the current expectation is for 2% growth for this year and 4% for 2013 for semiconductor materials revenues. If this happens, the materials market will experience four consecutive record breaking years, resulting in a market valued at $50.7 billion in 2013 (Figure 1).
Fig. 1: Materials Forecast By Segment
An interesting trend shown in Figure 1 is the increasing importance of packaging materials. Historically, wafer fab materials accounted for about 60% of the materials market revenues. However, in 2009, wafer fab materials contracted at a much more severe rate, driven in large part by steep declines in average pricing for silicon wafers—27% compared to 4% for packaging materials. Immediately out of the downturn, both segments rebounded sharply, but growth moderated for wafer fab materials in 2011 at 4%, while packaging materials grew 9% as demand increased for advanced packaging for smart phones and other mobile devices.
Figure 2 provides more detail into which materials are driving the change. In 2002, Silicon and Photomasks accounted for 38% of the total materials market. By the end of this year, it is expected that these two materials groups will account for 27%. Packaging materials substrates and bonding wire are expected to increase their prominence in the market, while gases, photoresists and photoresist ancillaries, leadframes and ceramic packages lost market share. A key driver of bonding wire’s increase is the price of gold. This is prompting many suppliers to transition to copper, which will represent about 30% of wire shipments this year. As copper wire adoption increases, we expect to see wire revenue share decline.
The increase share of packaging substrates highlights the importance of advanced packaging technology, which has become a critical enabler of mobile devices. Given the projected growth of the mobile market, we expect the packaging materials market to grow accordingly.
Fig. 2: Segments Evolve Over Time
Given the nominal growth expected for the semiconductor market, SEMI is forecasting that semiconductor materials will increase 2% this year and 4% in 2013, resulting in four consecutive record-breaking years for the materials market. The composition of the semiconductor materials market has evolved over the past decade. As the market for mobile devices swells, so will the need for advanced packaging solutions.
To learn more about semiconductor materials and key market trends, register to attend the SEMI Strategic Materials Conference, which will be held at SEMI headquarters in San Jose, California on Oct. 23 and 24. For more information about SEMI, visit www.semi.org.
—Lara Chamness is a senior manager market analyst at SEMI