Silicon wafer price expected to rise 25% by 2025

When price and availability trends for components like CPUs and GPUs seem to be heading in a good direction, a new report warns that silicon wafer prices will rise in price in the coming years.

According China Times, 12-inch wafer prices will top $200 for the first time in 2024. The report says that all silicon wafer makers have entered into long-term contracts with their customers to fix prices, so additional wafer production may be hard to come by.

The expected 20-25% increase in wafer prices between now and 2025 will be caused by several factors which include high demand coupled with a maladjustment in the world economy. However, the price of a silicon wafer itself is often only a fraction of the price paid for the finished product.

In 2021 and 2022 there was a lot of news about the opening of new chip factories around the world. Intel is expanding into Europe, while Samsung and TSMC are establishing large facilities in the US The main supplier of advanced chips, however, comes from companies such as GlobalWafers, Shin-Etsu and Sumco. These companies don’t have aggressive expansion plans like chipmakers do.

The semiconductor market tends to increase demand year after year

Taiwan’s GlobalWafers, a major contributor to the industry, has closed deals on all its wafers through 2024, the report says, along with Japan’s Shengco, which also has its wafer production sold out through 2026.

The top three silicon wafer makers “have already received advance payments from customers and launched a large-scale expansion plan,” says the China Times. However, these plans will only start to make a difference from 2024 at the earliest.