Fab Expansions in Europe Impact Materials Supply Chain

Can European Materials Supply Keep up with Growing Demand?

San Diego, CA, November 8, 2022:  TECHCET—the advisory firm providing business and technology information for the semiconductor materials supply chains — anticipates increased strain on European chemical availability as semiconductor fabrication companies continue to expand in the region. Samsung Foundry and TSMC are two examples of companies that have recently announced their intentions to build fab expansions in Europe (following Intel’s announcement earlier this year to build in Germany). These activities highlight the need to stabilize a reliable supply of chemicals and materials to these facilities. Additionally, near-term issues of rising energy costs and lower economic activity are currently impacting Europe’s semiconductor industry, so future growth and investments in manufacturing will need to address potential chemical and materials supply issues in the region.

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As noted in TECHCET’s Analysis Report on “The Impact of Chip Expansions on The Europe Wet Chemical Supply Chain”, fab expansions in Europe will require the support of additional chemical supplier investments otherwise semiconductor fabricators should prepare to look for alternative sources for key chemicals. In the report, TECHCET stated six chemicals were deemed to be at the highest risk of supply interruption, as confirmed by major Europe chip fabricators. These chemicals are hydrochloric acid (HCl liquid & gas), sulfuric acid (H2SO4), hydrofluoric acid (HF), ammonia hydroxide (NH4OH), and isopropyl alcohol (IPA).

In the past several years, Europe’s electronics wet chemicals (and gases) supply-chain has been suffering from interruptions at an increasing frequency, and they were expected to worsen for a number of reasons. For one, there has been a general lack of interest from chemical & gas suppliers to invest in upgrading older facilities for local wet chemical supply. Additionally, there have been increased dependencies on Asia / China that are plagued by logistics issues. Finally, stringent environmental regulations have made it difficult for companies to keep up with.

“Some chemical suppliers in Europe will consider investments if market conditions warrant the IT and capital support/co-investment is in place. If economically viable, a new plant, rather than an expansion of an existing plant, is advantageous in providing improved quality and higher purity chemicals needed to support advanced process nodes,” states Dan Tracy, Sr. Director at TECHCET.

TECHCET has determined the 16 nm and below process segments will undergo the strongest fab expansion growth over the next six years in Europe. For the supplier, building a new facility will better enable the manufacturing of higher-grade chemical, but the demand and volume projections need to be there to justify this type of supplier investment.

For more details on the Europe Chemical market segments, issues, and growth trajectory go to:

Don’t miss Lita Shon-Roy’s talk on “Semiconductor Market Expansion Driving Materials Innovation – Materials Market Outlook and Challenge” at the SEMICON Europa Materials Innovation Session next week on November 16th in Munich, Germany. To register, visit https://www.semiconeuropa.org/about/register

ABOUT TECHCET: TECHCET CA LLC is an advisory services firm expert in market analysis and business development of electronic markets and supply-chains for the semiconductor, display, solar/PV, and LED industries. TECHCET offers consulting, reports, and subscription services, including the Critical Materials Council (CMC) of semiconductor fabricators and CM Data subscription services. For additional information, please contact info@cmcfabs.org, +1-480-332-8336, or go to www.techcet.com.