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[MatSQ Column] #016. Current Status of the Semiconductor Materials Industry

2021-05-24 09:24:54

Semiconductors have presented a new world to mankind and, thus, are called 'magical stones'. The increasing number of laptop and tablet users since the outbreak of Coronavirus disease 2019 (COVID-19) has entailed the surging demand for semiconductors. They are often brought up when countermeasures are taken to cope with climate change, including the Green New Deal, solar cells, and LEDs. Can you imagine how these magical stones made up of billions of lines and dots on small substrates can influence the future of our humankind?


Current status of the semiconductor materials industry

In July 2019, when Japan enforced strict regulations for exports of key materials, the South Korean semiconductor manufacturing industry suffered from production delays for a while. Targeting the South Korean semiconductor/display industries, Japan tightened curbs on exports of three high-tech materials, such as hydrogen fluoride, photoresists (PRs), and fluorinated polyimides, necessary to the semiconductor fabrication process.

According to the Korea International Trade Association (KITA), the value of silicon wafers imported before the regulations reached USD 470 million. The proportion made in Japan amounted to 40%. At that time, the domestic semiconductor materials industry suffered a lack of original technology. In particular, system (non-memory) semiconductors, which require huge upfront capital costs, were highly inaccessible to venture companies or new startups.

Nevertheless, South Korea has taken advantage of Japan's export restrictions on materials as an opportunity to break through a barrier. Last year, Soulbrain Co., Ltd. and RAM Technology Co., Ltd. succeeded in the mass production of liquid hydrogen fluoride through their newly built plants immediately after Japan announced the regulations. SK Materials Co., Ltd. also began to successfully produce gaseous hydrogen fluoride, which had been fully imported from foreign countries. Around 92% of PRs(light-sensitive materials) used in the semiconductor fabrication process, were imported from Japan, but they are now sourced from other countries, such as Belgium and Germany.

In addition, more attention is paid to next-generation semiconductor materials, such as gallium nitride (GaN), gallium(III) trioxide (Ga2O3), and silicon carbide (SiC), as alternatives to silicon materials. Distinct from silicon, these are compound semiconductors composed of two or more elements. Usually, they have wide bandgaps (empty space between energy bands) and are stabilized even at high temperatures, thus ensuring higher power efficiency than silicon materials.

It was reported on May 9 that the Korea Institute of Ceramic Engineering and Technology (KICET) first succeeded in developing gallium(III) trioxide–based materials, which are becoming the center of attention. This compound has some advantages. It requires the lowest manufacturing cost among the next-generation semiconductor materials and can reduce the size of the power conversion module by at least 30%. Until now, Novel Crystal Technology, Inc. (NCT), a Japanese venture company, exclusively provides 2-in gallium oxide epitaxial wafers since successful commercialization in 2017. Therefore, if the KICET achieves success in commercialization, it will significantly contribute to the growth of the domestic semiconductor materials market.


Current status of the semiconductor industry

The semiconductor industry primarily deals with both memory and system (non-memory) semiconductors. The former, memory, refers to semiconductors that have switching and data (information) storage functions. The term “switching” means a kind of “door” that determines whether to receive a group of data. In other words, memory semiconductors are tasked with storing only information that has passed through switching.

DRAM (Dynamic random-access memory) and NAND flash are examples of memory semiconductors. NAND flash is considered non-volatile memory because it retains information even when turned off. On the other hand, DRAM is regarded as volatile memory because data are lost whenever power is removed. At present, South Korea's Samsung Electronics and SK hynix Inc. take up at least 70% of the global memory semiconductor market.

Conversely, system (non-memory) semiconductors, which refer to any other semiconductors except for memory semiconductors, are responsible for processing digital data mainly through operation and control. These semiconductors are largely used in next-generation future industries, such as artificial intelligence (AI), the Internet of Things (IoT), and autonomous vehicles. Optoelectronic/discrete devices, such as image sensors, are also included in the non-memory semiconductor sector. Intel Corporation, Qualcomm, and Nvidia Corporation, located in the United States, occupy 60–70% of the global non-memory semiconductor market.

Concerning system (non-memory) semiconductors, one substrate generally consists of multiple circuits to be equipped with diverse information processing capabilities so that one company cannot take on all the necessary processes. Therefore, the semiconductor industry is an aggregate of companies engaged in the design of semiconductors (fabless companies) and their fabrication (foundry). Recently, global companies, such as Apple, Amazon, Google, and TSMC (Taiwan), have been directly involved in designing semiconductors, and consequently, the demand for foundries is rapidly on the rise.

Memory semiconductors, which are sold as finished products, feature price inelasticity whenever supply and demand do not match. On the other hand, system semiconductors have relatively little price fluctuations because they are produced on demand according to the requirements. Even the market size of the latter is twice as large as the former.

South Korea is a memory semiconductor powerhouse, but its share of the global system (non-memory) semiconductor market stands at 3.2%, stagnating over the past 10 years. The country should cultivate the system (non-memory) semiconductor industry with the potential for high growth to achieve balanced development. To this end, Samsung Electronics announced the Semiconductor Vision 2030 plan in April 2019 and began to operate a new foundry fabrication line in their Pyeongtaek factory in February 2021.



On May 13 , the South Korean government announced the K-Semiconductor Belt Strategy, stating that it would strengthen R&D support to secure key technologies for next-generation semiconductors and AI semiconductors. According to the Semiconductor Equipment and Materials International (SEMI), the Korean semiconductor materials market is expected to grow from USD 9.23 billion in 2020 to USD 10.53 billion by 2022.

It took less than 100 years for a massive computer the size of a house to become a laptop computer. Semiconductors have allowed our desire to contain more information (data) on a smaller and lighter substrate (material). Isn't it marvelous that humans and machines can communicate with each other in the language of an electric current? Regardless of the economic boom or recession, semiconductors will continue to guide human life to a more prosperous future.




Clara Bo gyeong Kim

Virtual Lab, PR manager/Editor