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The semiconductor materials market will grow by over double the amount the semiconductor industry grows because of the high rise in units/steep decline in ASP scenario besetting the chip industry.

So, while the SIA predicts that semiconductor market growth of 4 per cent this year, SEMI, the trade body representing the suppliers of materials to the semiconductor industry, reckons the semiconductor materials market will grow 9 per cent.

This year SEMI expects the value of materials shipped to reach a record $46bn.

'Since 2003, the industry has continued to ship more devices than the previous year, at the same time average selling prices remain under pressure', reports SEMI, 'although overall device revenues have been setting records since 2004, it is clear that these revenues are the result of the tremendous volumes of chips shipped - not strength in pricing.'

'Material revenues roughly correlate to device shipments with the notable exceptions of 2000 and 2001', says SEMI, 'revenues from materials shipments outpaced device shipment growth in 2000 as device manufacturers placed double and sometimes triple orders to ensure continuity of supply. The sharp decline in the materials market in 2001 reflects the use of accumulated materials in inventory. In 2006, the materials market exhibited strength as additional 300 mm wafer capacity came online and advanced packaging was widely adopted.'

Since 2000, global wafer fab capacity has increased over 70 per cent to reach 16m wpm in 200 mm equivalents.

Between 1997 and 2005 spending on materials averaged 14 per cent of device revenues with 2007 and 2008 materials spending representing 16 per cent and 20 per cent respectively. This increase from the historical average is attributed to the aggressive 300 mm ramp and increasingly complex packaging technologies being deployed, as these materials have higher average selling prices.

'With the largest installed fab capacity base, and a significant manufacturing base in packaging, Japan continues to dominate worldwide semiconductor materials consumption at 22 per cent share of the worldwide revenues', says SEMI.

In 2004 Taiwan overtook the US in semiconductor materials consumption and, by 2006, the US was in fifth place behind Japan, Taiwan, ROW and Korea.

Fab materials currently make up about 60 per cent of the value of the total worldwide semiconductor materials market, with the majority of revenues coming from silicon sales.

Taken together, silicon and photomasks account for 64 per cent of the wafer fabrication materials market. In 2009 and 2010, overall fab materials growth is expected to achieve 7% per cent and 6 per cent growth, respectively, says SEMI.

'It is estimated that 45 nm and smaller geometries will account for 17 per cent of potential fab capacity this year, up from 4 per cent last year', concludes the SEMI report.

See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.