EU, U.S. Want More Silicon Wafers
The EU and the U.S. have announced separate agreements with Taiwan’s GlobalWafers, the world’s third largest silicon wafer supplier. GlobalWafers plans to build silicon wafer plants in those regions.
By Mark LaPedus
Hoping to bring more silicon wafer production to their respective regions, the European Union (EU) and the United States have announced separate funding and manufacturing agreements with Taiwan’s GlobalWafers.
In the first agreement, GlobalWafers, the world’s third largest silicon wafer supplier, was recently awarded €103 million ($112.1 million) in funding from the EU to establish a 300mm silicon wafer production facility in Novara, Italy.
Then, in a separate announcement, GlobalWafers in July signed a non-binding preliminary memorandum with the U.S. government to obtain up to $400 million in funding under the CHIPS and Science Act. The funding will help GlobalWafers to construct new silicon wafer manufacturing facilities in Texas and Missouri.
Silicon wafers, a key part of the semiconductor supply chain, are critical for the EU and U.S. Both the EU and the U.S. have separate and major initiatives to expand the production of semiconductors in their respective regions. The U.S. effort is called the CHIPS and Science Act, while the EU refers to its program as the European Chips Act.
These chip funding efforts have been devised for good reason. Over the years, the EU and the U.S. have become too reliant on Asia-based companies for their chip manufacturing requirements. In 2022, 82% or more of the world’s chip manufacturing fab capacity was located in Asia, according to the U.S. Semiconductor Industry Association (SIA) and Boston Consulting Group.
The chip efforts from the EU and the U.S. also address the semiconductor ecosystem. Take silicon wafers for example. Silicon wafers are required for the production of all chips.
Basically, in a facility, silicon wafer suppliers develop round and thin raw wafers at various diameter sizes, such as 150mm, 200mm and 300mm. Based on high-purity silicon materials, these wafers are sold to chipmakers, such as Intel, Micron, TSMC, Samsung, TI and others. Chipmakers in turn take these raw wafers and process them into chips in semiconductor manufacturing facilities or fabs.
(A range of silicon wafers at different sizes. Credit: Wikipedia)
There are several silicon wafer production plants in the EU and U.S. But overall, these regions produce a small percentage of the world’s silicon wafers.
In fact, five companies, including GlobalWafers, hold over 80% of the worldwide 300mm silicon wafer manufacturing market, and approximately 90% of silicon wafers are sourced from East Asia today, according to the U.S. Department of Commerce.
Today, Japan’s Shin-Etsu is the leader in the silicon wafer business in terms of worldwide market share, followed in order by Japan’s Sumco and GlobalWafers. Siltronic (Germany), SK Siltron (Korea), Soitec (France) and others make wafers. Suppliers from China are also producing silicon wafers.
Years ago, the U.S. had a strong position in the silicon wafer business. In 1959, U.S. chemicals giant Monsanto founded MEMC, a silicon wafer supplier. For years, MEMC was one the leading suppliers of silicon wafers, but the company fell on hard times during its tumultuous history.
In 1989, a German company acquired MEMC. Then, MEMC became a U.S.-based company again in 2001, when the Texas Pacific Group acquired a majority share of the silicon wafer maker.
In 2009, MEMC acquired a solar company called SunEdison. In 2013, MEMC changed its name to SunEdison. And in 2016, GlobalWafers acquired the silicon wafer unit of SunEdison.
The latter event was a blow for the U.S. semiconductor industry. SunEdison Semiconductor, formerly known as MEMC, represented the last major U.S.-based silicon wafer maker.
Today, GlobalWafers, Shin-Etsu, Sumco and others own and operate small-scale production facilities in the U.S. Ironically, the U.S. wants to rebuild its silicon wafer industry—with the help of a Taiwan-based supplier.
As a result of the proposed CHIPS investments, GlobalWafers plans to build the following plants:
*Establish a 300mm silicon wafer plant in Sherman, Texas.
*Establish a new facility to produce 300mm silicon-on-insulator (SOI) wafers in St. Peters, Missouri.
*GlobalWafers plans to convert a portion of its existing silicon epitaxy wafer manufacturing facility in Sherman to silicon carbide (SiC) epitaxy wafer manufacturing, producing 150mm and 200mm SiC epitaxy wafers.
Meanwhile, GlobalWafers is also expanding in the EU. In 2022, the Taiwan company announced plans to expand its production facility in Novara, Italy. At the time, the company only made 200mm silicon wafers.
Now, it plans to add a new 300mm wafer production module. The funding for the plant was made official last month by the Italian Ministry of Enterprises and Made in Italy group, following project authorization by the EU.
In total, worldwide silicon wafer shipments in 2023 decreased 14.3% to 12,602 million square inches, while wafer revenue contracted by 10.9% to $12.3 billion over the same period, according to the SEMI Silicon Manufacturers Group (SMG). Softening chip demand led to a decline in orders for 300mm and 200mm wafers. In 2024, the silicon wafer industry is projected to rebound.