Semiconductor & Chip Market Outlook

Global Shortage of Silicon Wafer Chips Fuels Ongoing Growth and High Throughput Demand

The global shortage of silicon wafers continues to plague companies that rely on semiconductors to manufacture their products. Silicon wafer inventories continue to lag significantly behind demand, fueling the ongoing revenue growth of the market. To this point, industry analysts predict that through 2026 the global silicon chip market will reach nearly $120 billion.

Semiconductor Applications

While semiconductors containing silicon wafer chips are used in a variety of products and electronic devices, the highest growth segments for applications using these components are healthcare, manufacturing, nanotechnologies, aerospace, and defense.

Adding to revenue projections for this segment—and driving the shortage of semiconductors—is the exponential growth in demand for mobile phones and wireless communication devices. This market demand is increasing the prices for these products and consequently increasing revenues for this segment.

The adoption of automated manufacturing and quality assurance processes, artificial intelligence, and machine learning in many industries, along with the mass adoption of automated systems requiring processors with high computing power, is also creating higher demand and raising revenue projections. Wafer sizes larger than or equal to 300 mm are expected to be the most lucrative products, as they are typically utilized in markets outside of personal computing devices. The use of these systems stands to increase rapidly over the next several years.

Silicon Wafer Production Challenges

Shortages of silicon chips themselves and the depleted supply of raw silicon to make them are not the only issues facing this market. The complex process of manufacturing silicon wafers along with continuously shifting specifications within it are key factors reducing availability and increasing demand. In addition, the high production costs of producing semiconductor wafers pose major challenges to the capacity of manufacturers to expand their operations, further stifling the availability of these critical components.

Geography’s Effect on the Shortage

The geographic location of silicon wafer manufacturers and the companies that use them may amplify the market impact of the shortage, considering that many of the largest and highest-producing silicon chip foundries are located in the Asia Pacific region. Much of the output produced in this area is used domestically, therefore, even if global increases in the supply are reported, they may not impact the ability of manufacturers in other areas of the world to utilize it to produce additional products in their local markets.

The Role of Non-Contact Measurement Technology

Given the opportunity for additional revenue from increased demand amid the limited supply for many products incorporating silicon wafer chips, fabricators must focus on maximizing output with the raw materials they have and avoid waste at every step of the complex fabrication process. The implementation of advanced non-contact thickness measurement tools may hold the key.

Applying advanced metrology tools during wafer fab increases the accuracy and precision of wafer measurement. These applications allow quality teams to measure microscopic ranges of variation in products of as little as 0.1 to 0.2 microns. This technology can help minimize packaging and patterning issues, resulting in less waste and higher yield. Overall, higher quality silicon wafers produced at a higher volume will serve to stabilize and increase profit margins by decreasing write-offs from sub-spec wafer fabrication, helping companies conserve their semiconductor inputs and use the inventory they can create to meet the growing market demand for their products.

For more in-depth details, read Lumetrics’ latest app note: Silicon Wafer Measurement

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