Post a CommentWafer Suppliers Set to Outpace Industry Growth
Online Staff -- Electronic News, 3/22/2005
While tool vendors may have to endure thin times in 2005, all that equipment brought in 2004 may mean good times for materials, namely wafer makers, as the 300mm ramp continues.
Wall Street market research firm Lehman Brothers suggests major silicon substrate suppliers will see market share gains and outgrow the industry in general in terms of revenue and profit for the next two years. Specifically, Lehman analyst Ted Parmigiani stated in a research note today that the transition to 300mm wafers, current and future capacity constraints for 200mm wafer production and a global and growing shortage of polysilicon substrates will all benefit the major wafer suppliers, in particular MEMC Electronic Materials Inc.
The market for wafer manufacturing will grow at a compound annual growth rate of 8.5 percent between 2003 and 2009 – jumping from $5 billion to $8 billion -- based on Gartner Dataquest data and forecasts, Parmigiani said. That growth, driven primarily by 300mm wafers, will disproportionately favor the four major wafer suppliers, he added.
Conversely, with the exception of Komatsu, Lehman Brothers expects attrition or consolidation and ongoing losses among the smaller players in the market.
"We view Wacker Siltronic as the segment's wild-card given highly-levered balance sheet and sub-par P&L metrics among Tier-1 players," Parmigiani said. "We believe 300mm wafer fab starts during calendar 2005 and calendar 2006 will account for 46 percent (or more) of total 300mm capacity for calendar 1999 through the calendar 2006 period."
The top four silicon wafer suppliers consist of Japan's Shin-Etsu Handotai and Sumitomo Mitsubishi Silicon Corp. (SUMCO), U.S.-based MEMC and Germany's Wacker Siltronic AG, which between them controlled nearly 80 percent of the market in 2004.
Lehman Brothers predicts that Shin-Etsu, SUMCO, MEMC and Wacker will all grow their market share from an estimated 30 percent, 21.5 percent, 14 percent and 12.3 percent respectively in 2004, to 33.2 percent, 23.6 percent, 15.7 and 12.7 percent respectively, in 2006. It cited data from Semiconductor Equipment and Materials International, Gartner Dataquest, individual company reports and its own estimates.
This growth would give those four 85.2 percent of the market in 2006, at the expense of smaller players like Komatsu, Toshiba and LG Siltron.
