Global Silicone Market Outlook, 2029

Market Dynamic

Market Drivers • Growing Demand for Electronics and Semiconductors: The increasing demand for electronic devices, such as smartphones, laptops, tablets, and IoT devices, is a major driver for the global silicon market. Silicon is a fundamental material in the production of semiconductors and integrated circuits, which power these devices. As technology continues to advance, the demand for more powerful and efficient electronic components grows, thereby fueling the silicon market. The expansion of the electronics industry, driven by innovations like 5G technology, artificial intelligence (AI), and the Internet of Things (IoT), contributes significantly to the demand for silicon. This trend is expected to persist as new applications in communication, computing, and automation emerge. • Rising Embrace of Renewable Energy Sources: The global shift towards renewable energy sources, with a particular focus on solar power, is another major driver for the silicon market. Silicon is a crucial component in the manufacturing of solar cells used in photovoltaic systems. As governments and industries worldwide aim to reduce their carbon footprint and promote sustainable energy solutions, the demand for silicon in the solar energy sector has seen substantial growth. The expansion of solar power installations and advancements in solar technology contribute to a sustained demand for silicon. With an increasing number of countries investing in renewable energy infrastructure, the silicon market is likely to benefit from the continued growth of the solar energy sector. Market Challenges • Supply Chain Disruptions and Raw Material Availability: The silicon market faces challenges related to supply chain disruptions and the availability of raw materials. Silicon is commonly derived from quartz, and any disruptions in the mining or processing of quartz can impact the supply chain. Additionally, geopolitical factors, trade restrictions, or natural disasters can lead to fluctuations in the availability of silicon, affecting market stability. Uncertainties in the supply chain can lead to price volatility and potential shortages in the silicon market. To mitigate these challenges, industry players may explore diversifying sources of raw materials and investing in technologies that enhance the efficiency of silicon production. • Technological and Manufacturing Challenges: The semiconductor industry, a major consumer of silicon, faces challenges associated with technological advancements and manufacturing processes. As the demand for smaller, more efficient electronic devices grows, there are challenges in scaling down semiconductor components while maintaining high performance. This can lead to increased complexity and costs in the manufacturing processes. Technological challenges can impact the ability to meet the demand for advanced semiconductor products. Industry participants need to invest in research and development to overcome these challenges and stay competitive in the rapidly evolving electronics market. Market Trends • Focus on Sustainability and Circular Economy: The global silicon market is witnessing a trend towards sustainability and the adoption of circular economy principles. Companies are increasingly focused on reducing environmental impact, optimizing resource usage, and developing eco-friendly processes in silicon production. This trend aligns with the broader global shift towards sustainable business practices. Silicon manufacturers adopting sustainable practices may benefit from enhanced market reputation and customer preference. Recycling initiatives and the development of greener production methods are becoming integral parts of the industry's long-term strategy. • Rapid Advancements in Silicon Technologies: Ongoing research and development efforts are driving rapid advancements in silicon technologies. This includes innovations in silicon-based materials, such as silicon carbide and gallium nitride, to improve the performance of electronic components. The industry is also exploring new applications for silicon beyond traditional uses in electronics and solar energy. The continuous evolution of silicon technologies contributes to the development of more efficient and versatile products. This trend enhances the competitiveness of the silicon market by enabling the creation of advanced materials for various industries, including automotive, aerospace, and healthcare. Covid-19 Impacts The pandemic disrupted global supply chains, affecting the production and transportation of raw materials and finished goods. Silicon, being a crucial material in various industries, experienced disruptions in its supply chain, impacting the availability and pricing of silicon products. The semiconductor industry faced significant challenges due to disruptions caused by the pandemic. The shortage of semiconductor chips affected industries such as automotive, consumer electronics, and manufacturing, as silicon is a primary material in semiconductor production. The automotive industry, a major consumer of silicon for electronic components, faced production slowdowns and disruptions. Lockdowns, factory closures, and reduced consumer demand affected the production and sales of vehicles, impacting the silicon demand in this sector. Research and development activities in the silicon industry may have been delayed or slowed down due to disruptions in laboratory work, restrictions on physical gatherings, and a shift in priorities towards addressing immediate challenges posed by the pandemic. However, the demand for electronic devices, which heavily rely on silicon components, experienced fluctuations during the pandemic. While there was increased demand for certain electronics due to remote work and digitalization trends, other sectors faced challenges, impacting overall silicon demand. The solar industry, which utilizes silicon in the manufacturing of photovoltaic cells, was affected by disruptions in production and project installations. Supply chain interruptions and lockdown measures in various regions led to delays and uncertainties in the solar energy sector.

Key Development

• In September 2023, Wacker Chemie AG, a silicone manufacturer, announced the expansion of their silicone production capacities in China with an investment of USD 160.34 million (EUR 150 million). The facility will be capable of manufacturing silicone fluids, silicone emulsions, and silicone elastomer gels. • In October 2022, Ferroglobe announced to restart of the 55,000-ton silicon metal facility in Polokwane, South Africa. The decision to renew the Polokwane facility was made as part of Ferroglobe's strategic plan to increase its capacity of silicon metal to address strong market demand. The Polokwane plant will enable the company to add lower cost and strategically located accommodation, optimizing its asset footprint and providing flexibility in managing the volatile energy markets in Europe. • In August 2022, REC Silicon and Mississippi Silicon agreement bolster the United States solar supply chain. This agreement will help Mississippi Silicon to gain a stronghold in silicon metal, especially in the solar industry.