Quartz price increased by 10%… Internalization of the material to combat the decline in industrial profits

The price of high-purity quartz (quartz), which is one of the raw materials for the processing part of semiconductors, soared by more than 10%. The demand for process consumables has increased significantly as the production capacity of semiconductor manufacturers has increased. There will be a decline in profits in the semiconductor materials and parts industry that use quartz. Quartz raw materials cost half the profit; thus, some quartz manufacturers are looking for solutions, such as internalization of materials and vertical integration.

An official from a quartz component manufacturer said: “The market price of quartz used in semiconductor process parts has climbed more than 10%. The rise in prices was significant last year amid an upward price trend. The quartz used for semiconductors is used to hold the wafers and is a base material for various consumables such as the internal focus ring and processing chamber which are etched together.

The rise in quartz prices is due to a surge in demand. The demand for quartz products has increased as the production capacity of semiconductor manufacturers, such as Samsung Electronics and SK Hynix, has increased. The process and etching steps have increased in particular to implement a thin semiconductor circuit, and the consumption has increased due to the parts which are frequently worn by the reinforcement of the output of the plasma. The uncertain supply and demand of raw materials, which are affected by changes in the global supply chain, have also been a reason for the rise in the price of quartz.

The total high-purity quartz market in 2020 reached KRW 960 billion according to market research firm TMR, and the market is expected to grow at an average annual rate of 6.3% over the next ten years.

The profit of the quartz component manufacturer will probably decrease when the quartz raw material supplier increases the price. Quartz parts for semiconductors accounting for 40-45% of the total material cost are the cause of this phenomenon. A semiconductor industry official said, “The price of quartz parts also needs to rise in line with rising raw material prices; however, it would be difficult to raise the unit price due to the nature Currently, the American Momentive Quartz Technologies, the German Heraeus and Qcell, and the Japanese Tosoh hold 80% of the world quartz market.

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Some quartz parts manufacturers try to ensure a stable supply chain for raw materials and minimize the impact of price increases. The major Korean manufacturers of quartz parts are Wonik QnC, Kumkang Quartz, Young Shin Quartz, DS Techno, Worldex and SKC Solmics, and among these companies, Wonik QnC has succeeded in vertically integrating the American division Momentive Quartz. The success of Wonik QnC suggests that it is possible to ensure a stable supply chain by securing a major quartz supplier. Another manufacturer of quartz components has also reported that the internalization of quartz is underway.

An industry official said, “It has become necessary to ensure a stable supply chain in response to the continued upward trend in quartz prices. Manufacturers cooperate with a quartz supplier and establish a fixed price supply contract for many years to ensure price competitiveness.

By Staff Reporter Dongjoon Kwon ([email protected])

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