Buyers of Silicon Wafers at Semiconductor Devices manufacturers face new challenges as the industry consolidates, technologies change and wafer requirements become further stratified by device type. This will be strongly felt for Buyers supporting 200mm and below production with total silicon purchases of $20 million USD or less. A very good option is to work with a strong full service third party silicon broker. As basis for this there is discussion of change in some of the key industry traits from 1970 to 2000, 200 to 2010, and 2010 to now.

1. Emergence of Full Service
Semiconductor Silicon Brokers
Full Service Semiconductor Silicon Brokers Emerging to Fill Supply
Chain Needs.
Astute Buyers especially at company's buying $20M per year of
Silicon should consider establishing a relationship now with a Full
Service Silicon Broker
Bill Kohnen
Silicon Buyers Roundtable

2. Full Service Semiconductor Silicon Brokers Benefits
 Working with a Full Service third party silicon broker* is a viable
option now even for mid sized device manufacturers purchasing
up to $20 million per year of silicon.
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Lower total cost by 10% to 15%
Reduce Supply Risk
Improve Logistics
Ensure access to best technology
Gain flexibility
Improve Quality
Benefits flow to both Producers and Buyers
*While I don’t really like the term “broker” at this point I do not know of a better widely used
description.
Bill Kohnen
Roundtable
Silicon Buyers

3. As Segment Emerges
 Brokers will smooth cycles by taking inventory for
steady customers
 Applications expertise will emerge at brokers
 Management of related needs for reclaim and
disposal
 Silicon producers direct relationships will be only
with hand full of users that may include joint
venture factory
 Good Brokers will add value and be able to chose
both their sources and clients carefully and will
not have to put themselves in losing business
Bill Kohnen
Silicon Buyers
propositions.
Roundtable

4. Key Trends in Silicon Industry
Not meant to be complete and acknowledge exact details and timing subject to debate
1970 to 2002
2002 to 2009
2010 onward
Silicon Producers
Lots of Silicon Providers
Consolidation of Traditional with Emergence of Suppliers in China and
Taiwan
Products
Homogeneous product serves all customers
Divergence of requirements with focus on end user
Value add products with EPI, Attempts at differntiation with Float Zone/
requirements (Microprocessor, Memory, Mixed Signal,
Denuded Wafer, SOI for high end applications but struggles for wide
Analog, Power, MEMS) Impact of new process technologies
acceptance.
(FinFet, FD-SOI, EUV)
Cutomer Interface
Lots of sales people working for silicon providers. Direct
Pulled back to suppoort by big regions; North America, Europe, Asia
contact and Sales and Account support for each Fab site
Almost no Regional Direct Sales.
Customers
Customers were device manufacturers that behaved in
Emergence of Foundries as customers. Solar begins to emerge as a high
similar fashion and segmented primarily based on size of
volume user.
demand and wager size
Foundries and top 3 device producers drive volume.Many
more types of customers that behave very differently based
on segment. Solar does not have a direct impact on
Semiconductor silicon market. Fabless companies dirve
significant volume. Consumer companies like Apple take hands
on apporach to devices
Big presence at Semicon with over the top
entertainment
No direct Semicon presence and lucky to get an e-mail
Christmas card
Contraction
Customer Buying Decisions
Despite being a homgeneous product relationships
between producer and end users important
Price Starts to Dominate Decision Making for both Producers and
Customers. Actual Commoditization of Silicon
Agreements
12 month pricing with multi year supply agreements
3 to 6 month proce agreements with no long term supply agreements or Longer term agreements possible when customer views a
frameworks
producer as lowest total cost option
Capacity
Consolidation of capacity based on wafer size. Capacity for lower than
On a macro level capacity is ok but within segments cutomers
Producers tended to over build capacity in up portion of 300 mm primarily the result of de bottle necking and taking advantage of
need to watch shifitng focus of producers. Esspecially as
cycles
meged equipment sets at a single location. Major customers form joint
450mm emerges and demand oscillates for high volume uses
ventures. Poly Silicon availibility SCARE
Broker/Non Producers Role
Role of broker very limited to supporting research
institutions and some spot test wafer requirements
Bill Kohnen
Capacity, supply and technical support within a segment
import.
Brokers emege as buyers of excess silicon to support solar demands.
Emergence of value added third parties to assist both Silicon
Reclaim Wafer companies start adding more value within their space and
producers and consumers
with supply chain
Silicon Buyers Roundtable