Although the earth’s crust is made up of 27-28% silicon, (not only) the semiconductor industry is facing a shortage. But it is quite understandable. If the demand for chips rises rapidly, they will reach a limit as production volumes increase. At first it was the capacity to produce the chips themselves (which was the first to deal with it), recently Intel talked about substrates for chip encapsulation and logically sooner or later it had to come to the silicon itself, from which the wafers are made.
In nature, there is plenty of silicon, but not pure, but in compounds, especially silica and silicates. Some of them have to produce silicon, and some of them have production capacities also dimensioned for normal demand, which means that if it is exceeded, the product will become insufficient and prices will rise. It shouldn’t surprise us either – outside of IT, we observe a lack of (seemingly) banal products such as building materials, including steel.
One of the largest producers of silicon is China. That in itself would not mean much if the already running production was not stopped by the lack of electricity that the country has been struggling with lately.
While in recent years the price of raw silicon has hovered around 15,000 yuan per tonne (almost half the price at the turn of the century), at the end of September the average price exceeded 60,000 yuan, approaching 70,000 for some producers:
This corresponds to more than $ 10,000, about 240,000 CZK per ton (for an idea: a cube with an edge of about 75 centimeters). In relation to the price of the finished wafer (units of thousands of dollars with the exception of the 5nm process), this is a small amount, but it is another of a number of inputs that are more expensive. The bigger problem than the price increase itself is the availability itself. Whatever the price, the availability will not improve in the near future. Current outages on the supply of raw silicon can then affect the availability of end products sometime in the second half of winter 2021/2022 or early spring.
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