A Sight into Global Semiconductor Materials Market

Due to the development of new technologies such as 5G, new energy vehicles and the Internet of Things, semiconductor industry is gradually picking up. In 2017, the global semiconductor materials market resumed growth, with a global market size of 46.9 billion USD. In 2018, the global market for semiconductor materials exceeded 50 billion USD with a year-on-year increase of 10.66%.

Semiconductor materials market keeps on growing

 

Because of the development process, China Taiwan is full of big wafer foundries and advanced packaging & testing plants, and it continues to be the world’s largest semiconductor materials consumption region. In 2018, sales revenue of semiconductor materials in China Taiwan reached 11.4 billion USD, with an increase of 10.68%.

Semiconductor material market scale in South Korea grew from 7.51 billion USD in 2017 to 8.74 billion USD in 2018, and surpassing mainland China by 16.38%.

As for mainland China, its growth was a bit slower than China Taiwan and South Korea. But its 8.44 billion USD’ volume is still considerable in the world market.

Taiwan remains the biggest market of semiconductor materials

 

Semiconductor materials market can be divided into wafer manufacturing materials market and packaging & testing materials market. Among these two markets, packaging & testing materials market is more stable, and wafer manufacturing materials market is more susceptible to the downstream market.

Demand of wafer manufacturing material grows faster

Silicon wafer, 31% of wafer manufacturing material market

Substrate take 41% of packaging & testing material market

 

In 2018, wafer manufacturing materials market accounted for 62% of the whole semiconductor materials market, and packaging & testing materials market took the rest 38%. Within all wafer manufacturing materials, silicon wafer took 33% of the volume, and following are electron gas and mask reticle. As for packaging & testing materials, substrate accounted for 41%, and then there are lead frame and bonding wires.

Silicon wafers are the core of semiconductors and have the highest cost ratio. They also have high requirements for purity. Therefore, the industry barriers are extremely high and a highly monopolistic pattern is present. Now, five top manufacturers, Japan's Shin-Etsu and SUMCO, Taiwan's Global Wafer, Germany's Siltronic and South Korea's SK Siltron have a market share of more than 90%.

Japan is the leading region of silicon wafer market

 

The global semiconductor electron gas market is also showing an oligopolistic competition. America’s Air Products & Chemical and Praxair, France’s Air Liquide, Japan’s TN-Sanso and Germany’s Linde account for 94% of the whole electron gas market.

Top 5 of electron gas industry are dominating the market

The mask reticle industry is characterized by technology intensiveness and capital intensiveness. Therefore, the global market is basically monopolized by Japan's JSR Co., Ltd., Korea's LG Micron and PKL, America’s Fenix and Toppan Photomasks, as well as China Taiwan’s AIPC and Hanmin Technology. And mainland China still has a certain technological gap to cross.

As for substrate industry, it is almost finished up by companies of Japan, South Korea and China Taiwan. At present, the top ten companies of substrate industry are all from these three regions, and the market share of these ten companies was as high as 81.98%. As for mainland China, only a few companies have the production capacity. And the overall market share of mainland China’s enterprises is less than 2%, which is far behind Japan, South Korea and China Taiwan.

Top 5 of substrate industry take 53.75% of the global market

Like other semiconductor industries, lead frame industry is a technology-intensive, capital-intensive industry. In the global market, lead frames are mainly supplied by Japan, Korea, and Germany. Most leading companies are in Asia, among which the top five manufacturers – Sumitomo, Newkon, DNP, Toppan and Mitsui account for about 70% of the lead frame market in the world.

The concentration ratio of bonding wires industry is also high. Japan is a major manufacturing region of bonding wires, and its product types, capacity and quality all rank first in the world.