Since the end of 2016, the global supply of silicon wafers—essential for integrated circuit (IC) manufacturing—has been shrinking, leading to a sharp price increase of around 60%. This has created a critical shortage in the market. In China, the domestic supply of 8-inch and 12-inch wafers is severely limited, with external dependence at 86% and 100%, respectively. As large-scale IC production lines are set to come online in China before 2020, the risk of supply disruption becomes increasingly real. To mitigate this, it is crucial to invest heavily in domestic silicon wafer companies, expand their production capacity, and ensure a stable supply chain for the growing IC industry.
The global silicon wafer market is dominated by a few international players. Companies like Shin-Etsu (Japan), SUMCO (Japan), GlobalWafers (Taiwan), Siltronic (Germany), and SK Siltron (South Korea) control over 92% of the market. In the more advanced 12-inch wafer segment, the top five firms hold over 97% of the market share. These companies have consolidated their power through acquisitions, such as GlobalWafers buying Topsil and SunEdison in 2016, which boosted its position. This concentration has given them significant pricing power, further tightening the market.
The surge in demand from sectors like IoT, data centers, and mobile devices has driven up silicon wafer prices. In 2016, the global IC market saw a strong recovery, with the WSTS predicting a 19.1% growth in 2017. Major players like Intel, Samsung, and TSMC announced major expansion plans, while Chinese companies like SMIC and Changjiang Storage also started new projects. This demand has led to a sustained rise in wafer prices, with 12-inch wafers reaching $120 each—a 60% increase since late 2016. With supply not keeping up, the global gap is expected to reach 5% in 2017 and exceed 10% by 2019.
China’s IC industry faces serious risks due to reliance on foreign suppliers. Leading companies like Samsung and TSMC are securing long-term contracts with wafer producers, leaving little room for Chinese manufacturers. Domestic wafer companies lack the capacity to produce 12-inch wafers and have limited 8-inch production, making them highly dependent on imports. This situation puts China's planned IC production lines at risk of supply shortages.
Despite these challenges, there is an opportunity for growth. The stagnation in global wafer technology, especially with the delay in 18-inch production lines, gives China time to catch up. Meanwhile, the rapid expansion of IC manufacturing in China creates a growing market for domestic wafers. By 2016, mainland China had 11 operational 12-inch lines and 13 under construction, with demand for 12-inch wafers expected to rise sharply. Government-backed funds are also investing in the sector, supporting companies like Xinsheng and Soitec, and laying the foundation for future growth.
To improve China’s silicon wafer supply, several strategies should be considered. First, continued investment in R&D through special funds can help develop key technologies like electronic-grade polysilicon and wafer manufacturing processes. Second, capital integration through strategic investments can strengthen domestic companies and boost their global competitiveness. Third, promoting collaboration between IC manufacturers, wafer producers, and suppliers will accelerate the adoption of domestic materials. Finally, guiding regional development based on energy availability and proximity to IC production can optimize the industry’s layout and enhance efficiency.
Parallel Actuator,Mini Electric Actuator,Linear Drive Actuator,Electric Actuator Controller
Kunshan Zeitech Mechanical & Electrical Technology Co., Ltd , https://www.zeithe.com