Siltronic To Exit Small Diameter Wafer Market by 2025

China likely now self-sufficient in the supply of 150mm and smaller diameter silicon wafers

In a surprise move on March 22 last, Siltronic issued a press release announcing their decision to quit the production of Small Diameter (SD) wafers, i.e. wafers below 200mm in diameter, according to their terminology.

Munich, March 22, 2024 – Siltronic AG (MDAX/TecDAX: WAF) plans to gradually cease production of polished and epitaxial small diameter wafers at its Burghausen site. The process, which excludes unpolished wafers, is set to be completed in the course of 2025.

Siltronic has been manufacturing SD wafers at their Burghausen, Germany facility since 1968. The move to end production of SD wafers comes less than a year after the retirement of former CEO Dr. Christoph von Plotho. He was replaced by Michael Heckmeier in a transition that had been in the works over the course of the previous year, details here.

While it’s clear that the broader market has long since shifted to 200mm and 300mm wafer diameters, the market for SD wafers still exists. Indeed, the majority of Silicon Carbide and Gallium Nitride wafers, the emerging wafers of choice for the high voltage, high frequency circuits required in Electric Vehicles & Renewable Energy power management systems, are still 150mm or even smaller in diameter.

So why is Siltronic, one of the longest established global players in the silicon wafer market walking away from the SD wafer market at this juncture? In answering this question, we shall be referring back to a detailed analysis we published on the topic of silicon wafers back in July 2018:

In the introduction to that deep dive, we included the following paragraph:

Of note on the horizon is the progress being made in China with the home-grown production of silicon wafers. With the backing of the National Silicon Investment Group (NSIG), Simgui and Zing Semiconductor are emerging as front-runners while Ferrotec's recent partnership with GlobalWafers is likely to cement that company's position as the current leader in the production of wafers of 200mm and smaller diameters. While unlikely to disrupt the global supply/demand dynamic in the short-term, the 3-5 year horizon is a different matter and needs careful assessment of the impact on the incumbent players.

We shall circle back to the conclusions we published in that analysis shortly and we will also discuss the implications of Siltronic’s decision for their global peers, the likes of SUMCO, Shin Etsu and Globalwafers? Let’s dig in….