Semiconductors Are Humming, But Displays Are Heading For A Fall

The good times will likely keep on rolling for suppliers of semiconductor materials in 2018. But the display materials market, prone to rapid boom-bust cycles, appears to be heading downward.

“Since demand for DRAM and NAND memory chips remains strong, the first half of 2018 will be good,” says Keiji Mihayashi, president of Fujifilm Electronic Materials, which supplies both the semiconductor and display industries. Strong demand for the two types of memory chip is linked to cloud computing, he adds.

Memory chips are a major market for firms like Fujifilm, Mihayashi notes. “High demand for the chips will boost the results of memory manufacturers, and sales of materials will correspondingly be good as well.”

Lita Shon-Roy, president of the electronic materials consulting firm Techcet, points to other reasons the semiconductor materials market is buoyant. Newly built semiconductor plants in China are boosting demand for materials. And advanced chips are often made using a materials-intensive manufacturing technique called multiple patterning. Meanwhile, supplies of materials remain tight across the semiconductor industry because “producers don’t expand capacity just because of one or two good years,” Shon-Roy says.

Silicon wafers are in the shortest supply because only a few firms make them. Supplies of high-purity gases and wet chemicals are limited as well. Any unexpected production halt can stress the supply chain, she notes.

The picture isn’t so bright for manufacturers of materials used in TVs and other flat-panel displays. The display market is prone to periods of oversupply when large, new plants come on-line, and this is happening now.

“A supply glut is widely expected, which will lead to a decline in panel prices,” warns Sang-Ho Kang, display technologies global business director at DowDuPont. “Display materials markets will feel growing price pressure from panel makers.”

But newer display technologies will spur both consumer demand and the need for new materials, Kang adds. For instance, the market for organic light-emitting diode displays is small but growing rapidly. And DowDuPont researchers are developing materials for use in foldable displays, which Kang expects to hit the market this year.