Demand for Silicon Outstrips Supply

Article By : George Leopold

SEMI reports record silicon wafer shipments, semiconductor manufacturing gear billings.

The hits keep coming for the global semiconductor industry that continues to benefit from record-breaking demand across the entire chip ecosystem from IC design and silicon wafers to manufacturing gear and foundry expansion.

The glowing quarterly numbers also reflect efforts by automotive and industrial customers seeking to restore IC supply chains, creating unprecedented demand for silicon.

The latest example came this week with global silicon wafer shipments hitting new records during the second quarter, eclipsing a milestone set during the previous quarter. The industry group SEMI reported this week that wafer area shipments exceeded 3.5 billion inches2 in the April-June timeframe, a 6 percent increase over the previous quarter.

Meanwhile, quarterly silicon wafer shipments grew 12 percent during the same period, driven by what SEMI described as “multiple end-applications.”

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Unrelenting demand for semiconductors is seen continuing for the foreseeable future as foundry operators scramble to add new manufacturing lines. “The supply of silicon for both 300-millimeter and 200-millimeter [wafers] is tightening as demand continues to outstrip supply,” said Neil Weaver, chairman of SEMI’s Silicon Manufacturers Group and vice president for product development and applications engineering at Shin Etsu Handotai America.

SEMI’s market estimate includes polished silicon wafers, including test substrates and epitaxial silicon wafers. The survey also includes unpolished silicon wafers shipped to customers.

The chip industry group also reported surging North American billings for semiconductor equipment. June 2021 IC gear billings totaled $3.67 billion on a three-month average basis, SEMI said. That total was 2.3 percent higher than the previous month and a whopping 58.4 percent higher than June 2020 billings.

“We are witnessing a structural shift in the industry marked by higher capital investments as demand for the semiconductors needed to power technologies unleashed by innovation and the digitization of economies continues to grow” declared Ajit Monacha, SEMI’s president and CEO.

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Indeed, automotive and other industrial sectors continue to struggle to maintain their chip supply lines. In reporting increased quarterly profits this week, Tesla chief executive Elon Musk said the current chip shortage forced the electric car leader to idle some production.

“The chip is the governing factor in our output,” Musk said. “This is out of our control. It seems like it is getting better but it is hard to predict.”

Tesla has reportedly weathered the chip shortage by switching to more widely available devices, then updating firmware in those embedded ICs.

This article was originally published on EE Times.

George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.


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