Semiconductor and power generation industries lead the pack in systems consumption
By Robert McIlvaine, The McIlvaine Co.
Taking into consideration key factors in the electronics, pharmaceutical, and power generation industries, the worldwide sales of ultrapure water (UPW) equipment, chemicals, and services likely will reach US$4 billion this year. This figure is nearly twice the size of the market at the beginning of the decade.
Ultrapure water systems provide virtually contaminant-free water for use in human injectables, super-critical boiler steam systems, flat-panel display (FPD) production, and semiconductor fabrication. These four applications are the predominant drivers of sales of UPW-related products such as reverse osmosis membranes, ion exchange resins, ultra-filtration membranes, pumps, valves, and controls.
Key industries and drivers
Water reclamation: Across all industries, the practice of water reuse and reclamation is gaining momentum. By reclaiming water, rather than sending it into a wastewater stream, industries can dramatically reduce municipal water usage. Water reclamation/reuse systems are starting to represent a “sub-market” for additional tanks, pumps, and purification equipment.
Semiconductors: The semiconductor industry continues to be the largest consumer of UPW systems. Applications include chip washing, chemical vapor deposition, disk drive manufacturing, and immersion optical lithography. With 2008 projected revenues of $1.9 billion for UPW systems in this segment, the semiconductor industry represents approximately 50 percent of the world market.
Power generation: Second to semiconductor fabrication applications, the power generation industry accounts for about 25 percent of the market. UPW system sales for power generation applications are expected to reach $1.1 billion this year.
Notably, there is a big transition in UPW installations in the power segment where sales of UPW systems for coal-fired boilers have been rapidly increasing. Sales of UPW systems for gas turbine combined cycle (GTCC) are slowly recovering after plummeting earlier in the decade. 2008 projections for sales into coal-fired plants are about $740 million compared to $53 million for gas turbine applications.
Pharmaceuticals: In the pharmaceutical industry, the highest growth sector for UPW system sales is in the biotechnology arena. While overall growth for UPW sales is maintaining an annual rate of about 7 percent, the demand for UPW systems in biotech applications is expected to be in line with growth of the biotech industry. Worldwide, UPW system sales in the pharma market will likely reach $268 million by the year’s end.
Flat-panel displays: FPDs have become the display of choice for electronic devices. As the demand for FPDs increases, so increases the demand for the ultrapure water required for FPD production. In terms of percentage growth, FPD fabrication is now the fastest growing market for UPW systems. Both liquid-crystal display (LCD) and thin-film transistor LCD (TFT-LCD) flat-panel fabrication technologies depend upon ultrapure water.
2008 UPW system sales for FPD fabrication facilities are expected to reach $474 million. In 2005, UPW system sales were approximately $277 million. In three short years, sales of UPW systems into the FPD market have grown by more than 70 percent.
Asia: In 2005, Asia accounted for approximately 58 percent of UPW system revenues. In 2008, that percentage is expected to climb to 67 percent. Increases in semiconductor and FPD production as well as construction of new coal-fired power plants are driving increased UPW system sales in Asia.
Recent Asian activities affecting sales include the following:
- Beijing-based BOE Technology has announced construction of a 4.5G TFT-LCD line in Chengdu, Sichuan Province.
- Taiwan-based Innolux Display is building a 6G LCD panel fabrication facility in Chunan, Taiwan.
- Hynix Semiconductor recently completed construction of a $1.2 billion wafer production line near Seoul, South Korea.
- Taiwan Semiconductor Manufacturing Co. (TSMC) is investing $5 billion in development of 15-, 22-, and 32-nm technologies.
- Chengdu Institute for Biological Products is building a production facility for Japanese encephalitis vaccines (to be located in Sichuan Province). Capacity will be 100 million doses per year.
- The Shanghai CP Guojian Pharmaceutical Co. is building a new facility that will include the largest mammalian cell-culture system in Asia. The facility expects to begin production of monoclonal antibodies (mAb) in August 2008.
By tracking industry trends in power generation, electronics, and pharmaceutical production, it is possible to predict trends in sales of UPW systems. While there are no guarantees, the future for sales of UPW systems and services appears to be relatively strong, especially in Asia.
Robert McIlvaine is president and founder of The McIlvaine Co. in Northfield, IL. The company first published Cleanrooms: World Markets in 1984 and has since continued to publish market and technical information for the cleanroom industry. He can be reached at [email protected]