June 27, 2007 – While the overall semiconductor industry limps along toward low-single-digit growth in 2007 (and maybe longer) due to oversupplies and punishing price declines, the record number of devices being shipped means better-than-expected growth for the semiconductor materials market, which could finish the year with 10% growth or more, according to data from SEMI.

In its materials forecast earlier this year, SEMI had projected 7.1% growth for total wafer fab materials. Now, SEMI says growth of more than 10% is expected, to top $24.0 billion (with another 10% increase projected for 2008), driven by the need for advanced materials to fabricate and package the record amount of devices being produced. Also, the continued ramp of 300mm wafer technology continues to drive materials sales, noted Dan Tracy, SEMI’s senior director of industry research and statistics.

Packaging materials are still eyed at around 13% growth to $16.6 billion, driven by the transition to flip-chip packages, according to Tracy. He noted, though, that higher raw material costs still “represent a major challenge.”

By region, Japan and Taiwan should remain the two largest material-consuming regions, followed by South Korea. China’s materials market grew by more than a third in 2006 as renewed fab and assembly facility investments translated to more capacity coming online.