Key Market Dynamics for Silicon on Insulator (SOI) Market

The global silicon on insulator market (SOI) size is projected to grow from USD 1.0 billion in 2020 to USD 2.2 billion by 2025, at a CAGR of 15.7% from 2020 to 2025. Effective use of silicon during the manufacturing of thin SOI wafers and low operating voltage and high performance of SOI-based devices are some of the factors expected to contribute to the growth of the SOI market across the globe. The flourishing Integrated Circuit (IC) industry, expanding SOI ecosystem in Asia Pacific, and increasing use of SOI in IoT applications act as growth opportunities for the SOI market. However, the floating body and self-heating effects in SOI-based devices act as challenges for the manufacturers of SOI wafers.

The Radio Frequency Front-end Module (RF FEM) segment accounted for the largest share of the silicon on insulator market in 2019.

Based on the product, the RF FEM segment accounted for the largest share of the SOI market in 2019. The growth of this segment can be attributed to the increased demand for RF FEM in upcoming 5G technology as well as consumer electronic devices such as smartphones, laptops, and tablets. Currently, all smartphones use RF chips comprising RF-SOI wafers. In the SOI ecosystem, wafer manufacturers and foundry players are also taking initiatives for the development of RF FEM products using SOI technology. For instance, GlobalFoundries (US) has developed advanced RF-SOI platforms that integrate low noise amplifiers, power amplifiers, RF switches, and phased-array antennas with RF FEM for advanced 4G LTE. The company is also focusing on improving the performance of its power amplifiers, low noise amplifiers, and RF switches to meet 5G FEM specifications with the help of advanced RF-SOI technology. These initiatives are expected to fuel the growth of the RF FEM segment of the market.

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The automotive application segment of the silicon on insulator market is projected to grow at the highest CAGR during the forecast period.

The automotive application segment is projected to grow at the highest CAGR between 2020 and 2025. This growth can be attributed to the increasing investments being made by automotive giants and other business leaders for the development of Advanced Driver-assistance Systems (ADAS) and driverless cars. For instance, Audi (Germany) is making efforts to integrate FD-SOI with devices or sensors used in its autonomous cars. These cars require high-speed, low-power, and compact electronic devices for their operations. This, in turn, leads to the increased demand for SOI-based wafers. Moreover, other products in autonomous cars that use FD-SOI wafers are infotainment systems, instrument clusters, Head-up Displays (HUDs), and e-cockpits.

The silicon on insulator market in APAC is projected to grow at the highest CAGR during the forecast period.

The silicon on insulator market in APAC is projected to grow at the highest CAGR from 2020 to 2025. Increased investments by wafer manufacturers and foundry players are influencing the growth of the SOI market in this region. For instance, in March 2018, Shin-Etsu Chemical Co., Ltd (Japan) carried out around USD 996 million facility investments for its silicone business. These investments are aimed at enabling the company to expand its business in APAC. Moreover, in June 2018, TowerJazz (Israel) announced the expansion of the RF-SOI 65 nm process in its 300 mm Uozu, Japan fab.

Key Market Players

Soitec (France), Shin-Etsu Chemical Co., Ltd (Japan), GlobalWafers Co., Ltd. (Taiwan), SUMCO (Japan), Simgui (China), GlobalFoundries (US), STMicroelectronics N.V. (Switzerland), TowerJazz (Israel), NXP Semiconductors N.V. (Netherlands), Murata Manufacturing (Japan), Skyworks Solutions (US), Qorvo (US), Sony Corporation (Japan), MagnaChip Semiconductor (South Korea), United Microelectronics Corporation (Taiwan), Taiwan Semiconductor Manufacturing Company (Taiwan), Qualcomm Technologies, Inc. (US), Silicon Valley Microelectronics (SVM), Inc. (US), EV Group (US), Ultrasil LLC (US), Siltronix Silicon Technologies (France), and WaferPro (US) are leading companies operating in the silicon on insulator market.

Market Dynamics:

Driver: Increased focus on e-learning to increase demand for smartphones, tablets, and laptops

Different business verticals, including retail, hospitality, automotive, manufacturing, and industrial across the world, are severely affected by the COVID-19 pandemic. The education sector is also facing challenges in terms of knowledge transfer to students. Educational institutions such as schools, colleges, universities, and research institutes in different countries across the world have been closed owing to the imposition of lockdowns to contain the spread of the infection. However, governments are promoting the e-learning process to avoid the academic loss of students. For instance, the Government of India is tying up with the providers of various platforms such as television, radio, apps, and the Internet to ensure the delivery of academic knowledge to students to avoid their academic year loss. This is spurring the demand for improved data centers, smartphones, televisions, tablets, and laptops. SOI wafers such as RF-SOI and FD-SOI are the integral components of these devices. Thus, an increase in demand for these devices is driving the growth of the SOI market during the COVID-19 pandemic.

Restraints: Floating body and self-heating effects in SOI-based devices

SOI technology is potentially a competition to bulk CMOS and Metal–Oxide–Semiconductor Field-Effect Transistors (MOSFET), owing to simple dielectric isolation, low power consumption, and the high-level of soft error immunity offered by it. However, unlike bulk CMOS and MOSFET, SOI-based MOSFET offer high body resistance yielded floating body effects in SOI-based devices. These floating body affected SOI-based memory devices have high current consumption that can cause loss of information.

Moreover, in SOI-based devices, an active thin silicon body is placed on silicon oxide, which is a good thermal insulator. During the operations of these devices, the power consumed by this active thin body is not dissipated easily and causes an increase in its temperature. This increase in the temperature of the thin active body decreases the mobility and current in SOI-based devices, which may damage or reduce their overall performance. Thus, the floating body and self-heating effects in SOI-based devices act as restraints to the growth of the SOI market.

Opportunities: Implementing automation solutions across the retail industry to avoid human intervention

The COVID-19 pandemic profoundly impacts the offline and online retail industry as customers are afraid to shop through both platforms owing to the fear of virus spread. A decline in e-commerce and offline retail business was observed from February to May 2020. As a solution to this situation, retail companies across the world are planning to deploy automation solutions in offline stores post-COVID-19 to minimize human intervention in shopping and delivery processes. This is expected to result in a widespread acceptance of advanced automation solutions such as robots, interactive kiosks, self-checkout systems (easy checkout using smartphones), smart payment options, smart delivery options (drones), and augmented and virtual reality devices. RF-SOI, FD-SOI, PD-SOI, and imager-SOI wafers are an integral part of these smart solutions. An increase in the deployment of these solutions is expected to contribute to the demand for different types of SOI wafers, thereby acting as a growth opportunity for the SOI market. SOI wafer manufacturers require to focus on the development of advanced, miniature, and cost-effective wafers to cater to the requirements of the retail industry post-COVID-19.

Challenges: The anticipated shortage of skilled workforce in SOI wafer manufacturing facilities

The COVID-19 pandemic is not only charged with political and economic ramifications but is also leading to the loss of several lives. Consequently, the problem of the shortage of skilled personnel in SOI wafer manufacturing facilities is expected to be aggravated further. According to the World Health Organization (WHO), as on May 14, 2020, more than 4,430,242 infected cases and over 282,700 deaths due to COVID-19 were recorded all over the world. With the rapid spread of this virus in countries such as China, Taiwan, the US, the UK, Italy, Spain, and India, the death toll is expected to rise at a significant rate in the next couple of months. The key players operating in the SOI market have their manufacturing and R&D units in these countries. For instance, Soitec, Murata Manufacturing, GlobalFoundries, Sony Corporation, and GlobalWafers Co., Ltd. have their manufacturing units in China and Taiwan. The workforce in these countries is not able to reach SOI wafer manufacturing facilities owing to the imposition of lockdowns, thereby resulting in a delay in the production and delivery of SOI wafer shipments. However, almost all countries across the world are expected to continue banning people from migrating from one place to another for a few more months to curb the virus spread. This is likely to lead to the dearth of skilled workers, which, in turn, is expected to contribute to a decrease in the manufacturing of SOI wafers. This is likely to lead to supply chain disruptions in the SOI market.