Semiconductor Plastics - A Look Into 2024

LOOKING AHEAD

With all the data and uncertainty that seems to surround the Semiconductor industry, especially with the ups and downs experienced over the last three years, it helps to gain insight into projections for 2024 and beyond as it relates to the plastics that feed into the industry. The drivers for plastics are a bit different than the top-line drivers for the Semiconductor industry in general. The following key metrics significantly influence the need for plastic materials to support the industry.

IC CHIP VOLUMES

At the apex of the value chain is the IC chip volume. Simply put, if chip demand is increasing then the need to increase all the touch points that require plastics will increase. 2021 global chip revenues spiked by 25% to $583 Billion USD. The following year plastics supply chain struggled to keep up with the resulting growth. 2023 IC chip demand decreased by 13%, resulting in a stalled plastics supply chain. The industry is forecasting a +13% rebound in 2024, and as a result, the motor that runs the ship is back online. Long term prognosis shows an industry surpassing $1 Trillion USD in 2023 with a CAGR of over 6%. Semiconductor is a good place to be.

CAPITAL EQUIPMENT

The capital equipment required to make a chip on a wafer is the most significant vertical for plastics used in the Semiconductor industry. Capital Equipment (aka Process Tools) demand is based on several factors, including IC chip demand and technology changes that require process tools with advanced capabilities and new fab construction.

From 2017 to 2020, the capital equipment industry ranged from $56 Billion USD to $64 Billion USD. In 2021-2022, the industry shot up to + $90 Billion. This enormous spike was due to several factors, including IC chip volume, new fab construction, and pent-up demand for equipment that resulted from the COVID-19 pandemic. After a year of decline in 2023 to $76 Billion USD, the industry looks to rebound back to +$90 Billion USD in 2024.

NEW FAB CONSTRUCTION

Between 2023 and 2024, the industry will see 50 new device fabs built and 23 expansions globally. 16 of these fabs are 10nm node and below. As the industry prepares to expand at 6% per year, the process tools, test sockets, and infrastructure materials used to line the fabs will drive significant growth in the plastics market for the foreseeable future.

SO, WHAT DOES IT ALL MEAN?

In 2021-2022, the plastics industry’s ability to service the Semiconductor industry was strained as the industry reached $90 Billion.

This was further complicated by other industries that use similar plastic products. The Semiconductor Capital Equipment industry is forecasted to grow to almost $150 Billion in 2028. The industry is here to stay and will present significant supply chain challenges to meet the growth over the next 5 years.

PORT PLASTICS IS YOUR SOURCE FOR ALL YOUR SEMICONDUCTOR PLASTICS NEEDS, WE ARE HERE TO DRIVE THE INNOVATIVE SUPPLY CHAIN SOLUTIONS REQUIRED TO SERVICE THIS GROWING INDUSTRY.