Chip demand is strongly driven, and electronic chemical suppliers have expanded capacity

For the foreseeable future, increasing digital content in daily life and business activities will lead the demand for electronic chemicals to lead other specialty chemicals
.
Recent events such as supply chain disruptions and ongoing semiconductor shortages have spurred suppliers to focus on building more resilient operating models through new capabilities, collaboration and innovation
.
At present, compared with the beginning of the year, the supply of electronic chemicals to the semiconductor industry has been strengthened
.

According to the latest Specialty Chemicals Update Program (SCUP) report released by S&P Global, the global electronic chemicals market will grow by 15.
4% from 2020 to 2021, and will grow by 7.
5% annually until 2026
.
This growth rate is significantly higher than the growth rate of other varieties in the specialty chemicals segment.
For example, the annual growth rate of specialty films over the same period is 5.
3%, which is twice the average annual growth rate of 3.
5% for the entire specialty chemicals industry
.

"Traditional consumer electronics such as PCs and mobile phones," Bertrand Loy, president and CEO of Entegris, a leader in specialty chemicals and advanced materials solutions for the microelectronics industry, said at Bernstein's 38th Annual Strategic Decisions Conference.
Products are still a huge driver, but applications such as industrial, automotive, etc.
are more promising
.
So I think semiconductor demand will grow at about twice the rate of global GDP growth in the next few years
.
”

While demand fundamentals remain strong, S&P Global forecasts that semiconductor demand will grow 8.
8% in 2022, not as good as the previous period
.
This is because the supply side faces many challenges in the near future, such as the new crown pneumonia epidemic, port congestion, high logistics costs, long supply chains, over-reliance on a single region and supplier, and shortage of raw material capacity
.
"Semiconductor shortages have become a major issue throughout 2021, especially in the automotive industry, and are expected to continue into the fourth quarter of 2022," said Vivien Yang, business director of chemicals, plastics and materials at S&P Global
.
Since the first quarter of 2021, the global Semiconductor capacity has been unable to keep up with growing demand, especially as natural disasters and accidents have made the situation worse
.

At present, the semiconductor industry is still strengthening investment, which also provides a positive outlook for the semiconductor industry
.
In 2021, the semiconductor industry invested $150 billion and is expected to grow by 20% in 2022
.
Major chipmakers such as TSMC, South Korea's Samsung, Intel and Texas Instruments have all started expanding production capacity in the US, Europe, China, Japan and South Korea
.

The increased complexity of handling advanced nodes is also a positive driver for the chemical industry, meaning more materials are required per chip
.
"Right now, chip companies and chemical suppliers are sellers' markets, and there are many challenges,
" Yang said
.
In addition, developing new materials needed for advanced chip architectures requires companies to invest “huge” amounts of money in research and development
.

Current capacity and innovation announcements show that the relevant suppliers are actively preparing to expand investment to meet the challenges
.
South Korea's SK Group recently said it will invest 142.
2 trillion won in semiconductors and materials by 2026
.
Plans include building a semiconductor industry cluster in Yongin, South Korea, expanding semiconductor manufacturing, and facilities related to materials, parts and equipment, such as specialty gas and wafer production
.

Germany's Merck & Co.
recently announced plans to invest 3 billion euros over the next five years to expand its electronics business
.
Michael Heckmeier, executive vice president and head of display solutions at Merck, said at the Chemical Weekly Specialty Forum in May: “The expanded investment is designed to help address the semiconductor industry shortfall, with approximately 1 billion euros in use.
For research and innovation, and 2 billion euros for manufacturing
.
" He added that its investments will include all major markets, including the United States, South Korea, China and Germany
.
About $1 billion is in the U.
S.
market, including Arizona, Texas, California and Pennsylvania
.

Air Products recently said it would invest $900 million in a new plant in Kaohsiung, China
.
The new subsidiary will build, own and operate multiple on-site units to supply ultra-high-purity nitrogen, oxygen, argon and hydrogen for the proposed chip factory
.

After winning long-term supply contracts from two major semiconductor manufacturers, Air Liquide also plans to invest more than 300 million euros to build four factories to supply ultra-high-purity industrial gases to semiconductor manufacturers in Japan
.
To fulfill the contract, the company plans to produce more than 1.
5 million cubic meters per year of nitrogen and other high-purity gases, with the first plant expected to start production by the end of 2022
.
Air Liquide also said that between 2022 and 2025, about half of its innovation spending will go to the energy transition and digital technologies
.