Samsung and SK Hynix are planning to buy lesser silicon wafers than intended earlier.
February 06, 2023
South Korean chipmakers Samsung and SK Hynix will be procuring fewer silicon wafers used in chip production than they were initially planning to go forward with, TheElec reported.Th
According to the sources, sometime during the fourth quarter, the chipmakers discussed the issue with their wafer suppliers. The five major suppliers in the silicon wafers market are Japan’s Shin-Etsu and Sumco, GlobalWafers from Taiwan, Germany’s Siltronic, and SK Siltron from South Korea.
When the global economy started spiraling down in 2022, the chip shortage continued. This was due to the fact that the silicon wafer comes under the back-end industry and the consumer market affected them later than the front-end industries that sell directly to customers.
During the third quarter of last year, the chipmakers reported their first profit declines whereas the wafer companies’ profits grew.
The chipmakers are seeking to acquire fewer silicon wafers than usual. Wafer supply deals are usually long-term, restricting the chipmakers to make adjustments on the number of wafers they buy. But according to sources, Samsung and SK Hynix are in talks with the suppliers to reduce the fixed number in the deal.
Due to the pandemic, the supply of these wafers was tight and in short supply for chipmakers for two years. According to Stratview Research, a market research company, the pandemic halted production activities across industries. The impact of this has been recorded across the supply chain too including the demand for silicon wafers, which plummeted by a significant rate in the year 2020. The decline in the end-use industries’ demand for silicon wafers negatively impacted its growth trajectory to an extent.
Silicon Wafers' Market Highlights
The decline in the end-use industries’ demand for silicon wafers negatively impacted its growth trajectory to an extent. However, the long-term market outlook still seems propitious with ample growth opportunities across regions. Also, the demand for consumer electronics and connected devices has been increasing significantly in recent years, given the rising disposable income, improving standards of living, and rapid urbanization. Overall, the Silicon Wafers Market is estimated to grow at a decent CAGR of 5.5% during the forecast period to cross the value of US$ 15.0 Billion by 2027.
Based on the diameter type, the market is bifurcated into 100mm to 150mm, 200mm, 300mm, and 450mm and above. Silicon wafers of 300mm are the most widely used type and they are expected to remain the biggest demand generator for silicon wafers in the foreseen future.
Based on the product type, the market is segmented as epitaxial wafers, polished wafers, SOI wafers, and diffused wafers. Among these product types, the epitaxial wafer type commands the market.
Based on the application type, the market is segmented as consumer electronics, MEMS, RF electronics, automotive, and photonics. Consumer electronics is expected to be the leading market for silicon wafers. In terms of regions, Asia-Pacific is expected to remain the largest market for silicon wafers over the forecast period.