Semiconductor materials grew 14% in 2007, SEMI says

Japan continues to dominate worldwide semiconductor materials consumption at a 22% share of the global market thanks to its wafer fab and packaging base.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 4/1/2008

While the semiconductor industry grew just 3% last year to reach $256 billion, the global market for semiconductor materials market grew 14% in 2007 to $42 billion, marking its fourth year of record revenues, and is expected to grow more than 11% this year, according to the Semiconductor Equipment and Materials International (SEMI) industry association.

The wafer fabrication materials and packaging sectors showed growth with increases of 17% or $25 billion and 9% or $17 billion, respectively, SEMI reported.

At the same time, Japan continues to dominate worldwide semiconductor materials consumption at a 22% share of the global market thanks to its wafer fab and packaging base, while Taiwan held onto the number two spot in terms of consumption of semiconductor materials for the past four years driven by strong growth in wafer foundries and packaging subcontractors.

The Rest of World region (ROW), which includes Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets, claims the number three spot in the materials market due to packaging materials, while the semiconductor materials market in China is growing at the fastest rate given the new capacity coming on-line from a previously small base.

“As the semiconductor companies continue to ship record amounts of units, demand for materials is increasing, as well,” Dan Tracy, senior director of industry research and statistics at SEMI, explained in a statement “Heightened demand in addition to the tight supply for various gases, silicon, and the widespread adoption of advanced packaging technologies are resulting in very strong revenue growth for semiconductor materials suppliers."

2006-2007 semiconductor materials market by world region
(dollars in millions; percentage year-over-year)

Source: SEMI, March 2008
* Totals may not add due to rounding

Meanwhile, last week SEMI president Stanley T. Myers announced that global equipment sales rose 6% to $40.5 billion in 2007, with Taiwan surpassing Japan as the top semiconductor equipment spending region and that the China new equipment market approaching the size of Europe's new equipment market. The growth reflects the momentum of the 300-mm ramp and intensive memory investments.