TECHCET—the electronic materials advisory firm providing business and technology information— is forecasting revenues for Silicon Fabricated Parts to decrease by 5% in 2023, reaching a total of US$856 million. This slowdown is due to overall downtrends within the semiconductor industry, alongside lower numbers of wafer starts. TECHCET is forecasting a sharp rebound of near 11% for the Silicon Parts market in 2024, as explained in the newly released Silicon Parts Critical Materials Report.
Silicon parts purchases from OEM’s for new etch and deposition tools grew in 2022 to make up about 50% of all sales. This increase in OEM purchases was due to higher demand for equipment. OEM tool sales are expected to ease over the next 2 years as demand from chip fabs for spare parts increases.
Over the past decade, global polysilicon production capacity has ramped significantly, from 30,000 or so metric tons in the 2000s, to almost 700,000 metric tons currently. However, demand for silicon parts continues to steadily grow, requiring even more additional capacity needs. Beyond 2023, supply tightness for silicon parts is currently expected as etch and deposition steps increase for 3DNAND and leading-edge logic devices. Additionally, strong growth in the OLED market may cause supply chain problems for silicon parts equipment. Semiconductor equipment companies may consider buying parts in advance to alleviate future supply chain bottlenecks.
Higher pricing and lead time issues may also occur without silicon parts capacity increasing. As long-term purchase agreements expire, the price of raw materials have gone up for major suppliers. Additionally, inflation, logistics, and labor shortages will all play a role on the silicon parts segment going forward.