Global silicon wafer sales to increase over 20% in 2018, says Digitimes Research

Tony Huang, DIGITIMES, Research, Taipei

Sales in the global semiconductor-grade silicon wafer market are forecast to rise over 20% in 2018, after surging 20.8% in 2017, thanks to a continued rally in silicon wafer prices, according to Digitimes Research.

The average selling price (ASP) per square inch of silicon wafers came to US$0.86 in the first quarter of 2018 reaching the highest since 2013, said Digitimes Research. The ASP is expected to reach US$1 at the end of 2019, approaching the 2009-2011 level.

With silicon wafer ASPs looking promising, suppliers are set to enjoy profit growth over the next several years, Digitimes Research indicated.

Top silicon wafer company Shin-Etsu saw its operating margin climb to 32.2% in the first quarter of 2018, up from 31.2% in the prior quarter and 24.7% a year earlier, while second-ranked Sumco's operating margin grew 6.4pp sequentially and 11.9pp on year to 25.3%. Shih-Etsu and Sumco collectively hold a more than 50% share of the global silicon wafer market.

Taiwan-based GlobalWafers, the world's third-largest silicon wafer supplier, saw its operating margin swing to 10.1% in the first quarter of 2017 from negative 3.7% in the fourth quarter of 2016. GlobalWafers' operating margin continued its rally reaching 28.2% in the first quarter of 2018.

The supply of silicon wafers particularly that of 8- and 12-inch ones will remain tight for at least one to two years, according to Digitimes Research. Whether the tight supply will persist after 2020 will very much depend on the demand side. Industrial, IoT and automotive applications will play major drivers of demand for 8-inch wafers, while demand for 12-inch wafers will come from mainly the cloud storage and smartphone segments.