Silicon-on-Insulators: Technology and Markets

Report Highlights

• The world market for SOI is expected to grow from about $212 million in 2003 to $992 million by 2008, at an average annual growth rate (AAGR) of 36.2%.
• Of the two major SOI types (thin- and thick-film), thin-film is destined for prime growth (AAGR of 41.8%).
• Thick-film SOIs will see a more sedate growth orientation, resulting in an aggregate uptick of 21.9% through the end of the forecast period.
• On the whole, the markets for SOI-technology-based products and servicesare expected to be on a linear increase through 2008. The technology is constantly in demand as it strives to improve the performance of superfast, high-power and high-temperature electronics systems.

INTRODUCTION

Over the last half-century or so, the electronics industry has relied on silicon as the foundation for all electronics-based products. Now considered a commodity, thanks in part to its global pervasiveness, silicon has been the key ingredient for semiconductors that power contemporary advanced electronics devices. Major innovative breakthroughs in the semiconductor industry, however, no longer are expected to solely come from silicon material.

But a more radical change is needed in the material structure, processing method, or device design to enhance integrated circuit (IC) performance. With the push for increasingly smaller devices, semiconductor manufacturers have faced three major challenges: reducing power consumption and heat dissipation and boosting device performance, all while accommodating scaling demands.

With these growing needs, the industry is looking at innovative technologies, such as silicon-on-insulator (SOI), as a possible panacea. By offering an opportunity to deliver higher speed, while also lowering power consumption, SOI was created to combat these bottlenecks. A 1945 patent on MOS transistor structure noted the advantages of having an oxide layer beneath the structure, but it was not until the 1990s that the manufacturing capabilities to create high-quality SOI wafers were in place. Now, SOI is seen as critical to extending the life of silicon technology.

This timely BCC report covers the SOI market, examining its fundamental basis, key technology drivers, primary uses, critical applications and component segments, and provides market forecasts through 2008.

SCOPE OF STUDY

The report contains:

• Analysis of all SOI segments in terms of market size and revenue trends with revenue forecasts through 2008
• Forecasts for the most important applications by product
• Technology discussion focused on trends that will develop more significantly during the fore- cast period
• Discussion of competitive aspects of each segment, along with several successful suppliers’ market strategies
• A survey of U.S. SOI-related patents from 2001 to 2004 (partial)
• A current industry directory and profiles of selected leading SOI vendors/users.

INFORMATION SOURCES

Research for this report was conducted via a number of data channels. The primary sources of information were (i) Internet searches and industry association data, and, (ii) interviews conducted with chip component suppliers, custom engineering companies, and manufacturers of representative applications. In addition, other secondary sources were consulted for the report, including reviews of industry journals and publications, product literature, white papers and technical journals, and financial reports for industry suppliers. Internal sources included earlier reports from BCC on advanced electronic materials technologies.

METHODOLOGY

Noteworthy here is to elucidate the approach used to deduce growth projections for the SOI market, especially considering its relationship to the overall high-tech electronics and semiconductor industry.  The methodology was as follows:

• First, we tabulated annual revenue numbers for the overall high-technology industry, the semiconductor business, and for chip-categories for the past 15 years (1988-2003).  The goal was to determine trend lines, potential drift cycles, and, most importantly, relationship formulae between the industries.  Using the historical data, we were able to decipher a relationship equation between the chip component segment revenues and the high-tech industry revenues.

• Next we assessed extraneous factors, such as
  
  • Economy (for example the slowdown over the past few years)
  • Vacillation in market demand—downturn in telecom and rise in auto, for example
  • New technology innovation in the end-use markets (signifying greater feature demands on the chip features arena).  The most popular example here was the pervading Internet phenomenon.
  • Geographical trend changes, for example, the rise of Asia-Pacific as a major consumer of electronics.
  These key pointers were factored into the original relationship equation to get a more realistic and customized average annual growth rate trend, especially catering to the varying demand and average annual growth projected for different end-use applications within the SOI landscape.

•  Finally, the end results were compared to the initial relationship matrix to ensure that the SOI numbers are aligned with estimated projections that have been stated for the semiconductor and overall technology industry to a reasonable extent.

The stated approach can be best elaborated with a practical sample. To take an example, the revenues for semiconductor shipments over the last 5 years (starting 1998) showed an average annual growth rate (AAGR%) of 8.4%. Correspondingly, the average annual growth of SOI-based chip component revenues over the same period came in at 7.8%. The key parameter for our purposes, the coefficient of relation, between total SOI and total semiconductor was, therefore analyzed as being equal to 0.92.

As a next step, BCC researched the semiconductor revenue forecasts as projected by the Semiconductor Industry Association (SIA). The association projects semiconductor average annual growth at 10.8% over the 20-year period from 1988 to 2008. Using the same coefficient of relation that we deduced before, BCC estimated the 10-year AAGR for SOI. The aggregate growth for 20 years resulted in (i) the AAGR for 2003-2008, and, (ii) annual growth rates from 2003 through 2008, based on annual variances in internal and extraneous-to-industry factors, such as demand, innovation, system consolidation, etc.

To validate the methodology and the numbers, BCC computed the same exercise by drawing a comparison between SOI-based component revenues and another closely related market, microprocessors. By plotting the same ratio across the forecast period, we validated our projected numbers.

From an applications perspective, the SOI wafer market forecast is based on the estimated demand in six major applications-Computing, Telecommunications, Consumer electronics, Automotive, Medical and Office Equipment, and Industrial and Military Electronics. Application demand was aligned with corresponding demand for chip component categories, such as MPUs, MCUs, and memory, etc. The tenet of Revenue/Square Inch was utilized to assess the equation relationship between application device demand and silicon wafer demand.

All amounts expressed in market tables are in constant 2003 U.S. dollars.

ANALYST CREDENTIALS

Ravi Krishnan has over eleven years of extensive professional and research experience in high technology with a special focus on the semiconductor industry. His work experience in this regard includes research analyst and subject matter expert roles at market research firms, Cahners In-Stat Group and Integrated Circuit Engineering Corp. in Scottsdale AZ, and as a High-tech Strategy Consultant for PricewaterhouseCoopers Consulting. Currently, Ravi is with the General Electric Corp. in a technology strategy capacity. Mr. Krishnan has an MBA and a graduate degree in Mass Communications, both from the Arizona State University, and an undergraduate degree in technology from the Birla Institute of Technology & Science, India.