Shortage in propylene oxide to further burden chip prices
Dongjin Semichem and ENF Technology have sent requests to their customers Samsung Electronics and SK Hynix to increase the price of thinners by up to 50%, TheElec has learned.
The companies are asking for the raise to come in to affect starting in April. Samsung and SK are running simulations to consider the affects of such a price hike, people familiar with the matter said.
Thinners are base materials used to eliminate unnecessary photoresists in edges of boards and nozzles that spray photoresists in semiconductor and display production processes.
Thinners are made out of propylene oxide (PO). The PO are processed into propylene glycol monomethyl ether (PGME) and propylene glycol methyl ether acetate (PGMEA). These are then made into thinners by companies such as Dongjin and ENF.
PO is mostly used for polyurethane and cleaners. Semiconductor and display only account for around 5% of the global PO market.
Demand is strong from all industries that use PO, but supply has not concurrently expanded, a person familiar with the matter said. This cause a price increase of 90% from the beginning of 2020 to year’s end, they said. Prices of PGME and PGMEA have also jumped 80% in the same time period, the person said.
The freeze in Texas caused Dow Chemical to halt its PO factory there, which caused prices of the material to increase even further. Costs of PGME and PGMEA have doubled from the second half of 2020 recently, the person said.
The COVID-19 pandemic and natural disasters are causing a vicious circle of shortage of materials and problems with distribution that will cause companies to rise and fall, they added.