Gartner Says Worldwide Silicon Wafer Market Returned to Positive Growth in 2002
STAMFORD, CONN., May 29, 2003 — Worldwide silicon wafer revenue totaled $5.7 billion in 2002, an increase of 5.2 percent from 2001 revenue of $5.4 billion, according to Gartner, Inc. (NYSE: IT and ITB). The industry returned to positive growth in 2002, after suffering through 2001 when revenue declined 31 percent.
Wafer demand on a surface area basis surged 19 percent in 2002 to 4,781 millions of square inches (MSIs), compared with a major decline in 2001. While MSI-based wafer demand recovered strongly in 2002, wafer prices continued to decline.
"The high-value-added product, 300mm wafer, steadily penetrated the market, but at the cost of its premium price advantage," said Takashi Ogawa, principal analyst for Gartner's semiconductor manufacturing research group. "Despite the decline in prices, the success of vendors in the 300mm wafer business clearly reflects the impact 300mm is having on the industry."
Shin-Etsu Handotai and SUMCO, the No. 1 and No. 2 respective vendors in the market (see Table 1), focused on the 300mm wafer business, and each experienced positive growth and profited from its first-to-market position.
Table 1
Worldwide Silicon and Epitaxial Wafer Manufacturing End-User Revenue Estimates in 2002
(Millions of U.S. Dollars)
Company
2002 Revenue
2002 Market Share (%)
2001 Revenue
2001 Market Share (%)
Growth (%)
Shin-Etsu Handotai
1,635.9
28.9
1,500.5
27.9
9.0
SUMCO
1,319.3
23.3
-
-
-
Wacker Siltronic AG*
874.7
15.4
881.0
16.4
-0.7
MEMC Electronic Materials*
723.9
12.8
655.6
12.2
10.4
Komatsu Electronic Metals
485.6
8.6
463.5
8.6
4.8
Others
629.0
11.1
1,886.2
35.0
-66.7
Total Market
5,668.4
100.0
5,386.8
100.0
5.2
Note: *Results for Wacker Siltronic AG and MEMCO Electronic Materials include sales by the joint venture companies.
Source: Gartner Dataquest (May 2003)
Although Wacker Siltronic AG entered the 300mm wafer business relatively early, the company suffered sluggish sales in the Americas region, where revenue declined 12 percent. Gartner believes that the strong euro-to-U.S.-dollar exchange rate partially dragged the company's share gain in the severe price competition.
Gartner analysts said vendors should expect further consolidation in the industry. In 2002, the merger of Sumitomo Metal Industry and the silicon wafer division of Mitsubishi Materials, created SUMCO, which resulted in the second-largest vendor being much closer to the industry leader, Shin-Etsu.
"This certainly has sent a shock wave to the peaceful industry landscape, where market share remained stable over the past decade," Ogawa said. "We believe market share will become volatile through the consolidation process, and a major reshuffle will take place in the next three to five years."
Additional information is available in the Gartner Dataquest Alert Silicon Wafer Market Grows 5 Percent in 2002. This Alert provides market share rankings for the top 10 vendors, as well as analysis on the overall industry. This Alert can be purchased on Gartner's Web site.
Gartner analysts will provide their outlook for the overall semiconductor industry at the upcoming Breakfast Briefing "Semiconductor Industry and Market Update, Q2'2003" June 12 at the Millenium Hilton in New York City. For more information, including the agenda, please go to www.gartner.com/pages/docs/gartner/focus_areas/gartner-dqsemi_invite.pdf.
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