Wafer shipments back on track: Inside the numbers

October 23, 2012 – The semiconductor manufacturing sector continues to spin its wheels in an attempt to find traction amid lingering economic uncertainty. Another example: wafer demand is slowly pulling back onto a growth track, and will set new records in terms of shipments in the coming two years, according to data from SEMI.

Total wafer shipments declined -3% in 2011 after a record surge in 2010, and are expected to stay flat in 2012, according to SEMI’s latest tally. But shipments should swing back into mid-single-digit growth in 2013 and 2014 and surpass 2010’s levels.

"In spite of heightened economic uncertainty, silicon shipments for the first half of 2012 were very promising," stated Denny McGuirk, president and CEO of SEMI. "We expect 2012 silicon shipments to remain essentially flat when compared to 2011 and increase in 2013 and 2014."

Total electronic-grade silicon slices in millions of sq. in. shipped by the wafer
manufacturers to the end-users. Includes virgin test wafers and epitaxial
silicon wafers; does not include non-polished wafers. Shipments are for
semiconductor applications only and do not include solar applications.
(Source: SEMI)

A closer look at wafer demand, courtesy of Semico Research, shows a clearer picture of wafer demand, and the swings for demand of different silicon types. Total wafer demand is increasing at around 11% CAGR over the next five years, but the splits by technology show that wafers for MPUs only make up 3% of total industry wafers — while wafers processed into chips for wireless end use have grown tenfold in the past decade. (Other segments have eroded, like DSPs, as capabilities are integrated into the system-on-chip.)

Silicon shipments vs. wafer demand. (Source: Semico Research, SEMI)

The biggest driver in wafer demand, clearly, is anything tied to mobile devices, and the big winner is NAND flash memory. Demand for NAND wafers tripled from 2005-2010; even with NAND manufacturers increasing density with multilevel cell architectures, NAND wafers have increased their share of total wafer demand from 4% in 2005 to nearly 18% now, according to Semico, and 51 million NAND wafers will ship by 2016. NAND wafer demand in 2011 peaked at 32Gb/45nm, while 2012 NAND demand will peak at 64Gb/22nm. The more mobile devices proliferate with increasing functionality, the stronger the appetite for NAND per system — and as more mobile/remote functionality is pushed into "the cloud" NAND will be making inroads into servers, too, thanks to its better power usage and faster access speeds, Semico notes.

All these different variances in demand funnel down to one very stressed position these days in the semiconductor world. While engineers and visionaries are figuring out how to keep Moore’s Law going with new architectures and materials, purchasing managers are on the hot seat to navigate the variances in wafer usage and inventories. "Product ramps, semiconductor sales, and technology transitions are getting more and more difficult to plan," explains Joanne Itow, managing director at Semico Research. "A purchasing manager’s job is tough in these volatile times."


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