The global semiconductor materials market is expected to grow 2% this year. It is hard to compare with the 10% growth from last year due to the memory sector’s boom, but contrary to the equipment market declining 4% over the same period due to the decline in facility investment (CAPEX).
According to the International Semiconductor Equipment Association (SEMI), the semiconductor materials market grew to $ 49 billion (about 55 trillion won), growing by 10% last year compared to 2017 ($ 47 billion). This year, it is expected to grow by 2%, reaching
$50 billion (about 56.16 trillion won). This is attributed to the full-scale operation of the semiconductor plant, which has completed its investment, and the increased consumption of materials due to the increased number of processes.
Semiconductor materials are largely divided into the pre-process (wafer fab) and post-process (packaging). The weight of each process is around 6:4. Pre-processing materials include silicon wafers, photomasks, photoresists, photoresists, photoresist auxiliary materials, wet chemical, gas, sputter targets, chemical mechanical polishing (CMP) slurries and pads, and other/new materials. Silicon wafer, photomask, and gas are the top three products. Sales of photomasks ($65 million), silicon wafers ($58 million), and gas ($20 million) are expected to show the highest sales growth this year.
Post-process materials include lead frames and substrates, ceramic packages, encapsulation resins, bonding wires, and adhesives. The amount of the sales this year are in the order of PCB, bonding wire, and lead frame. Among them, the board market is estimated to be $634 million (about 710 billion won), the only reverse growth ($6 million). The growth rate, which was 5% in 2017 and 3% in 2018, will drop to 1% this year.
Looking at the semiconductor material growth rate over the past three years, the pre-process materials are overpowering the post-process materials. In 2016, the growth rate of the pre-process grew by 3%, but the post-process posted a reverse growth by 4%, while each grew by 13% and 5% in 2017, respectively. Last year, 14% of the pre-process growth was recorded, but post-process grew only 3%. SEMI has analyzed that the growth in the pre-process was thanks to the active use of various pre-process technologies such as extreme ultraviolet (EUV) exposure, atomic layer deposition (ALD), and plasma chemical vapor deposition (PECVD).
The future uncertainties include the US and Chinese trade disputes, exchange rates, and international metal prices. Bonding wire, one of the post-processing materials, began to be widely used in place of gold in 2016, and international copper prices have soared since this time. Material changes had a negative impact on overall packaging material revenue.
"Many material suppliers are based in Japan, so a drop in yen could affect packaging material revenues," SEMI said. This means it should be considered that Japanese companies account for 55% of the semiconductor materials market.
Meanwhile, SEMI expects the semiconductor market to grow 2.6 percent this year, which is significantly lowered from 22 percent in 2017 and 15.9 percent in 2018. However, the semiconductor equipment market is expected to rebound strongly to 20.7% in 2020. All semiconductors and materials markets are also expected to rise on the same trend.