SAN JOSE, Calif. -- Prices for silicon wafers are increasing amid tight supply in the industry.
For example, one supplier, MEMC Electronic Materials Inc., said that it raised its silicon wafer prices by the ''low single digits'' in the first quarter. Silicon wafer capacity is also ''tight'' for both 200- and 300-mm products, MEMC said.
The U.S.-based company will also raise its prices for silicon wafers in both the second and third quarters by the ''low to mid-single digits.'' SEH, Sumco, Wacker and others are also believed to be raising their silicon wafer prices.
There has been a strain on the supply chain following the horrific downturn in 2009. ''Because of the market plunge in 4Q '08 and 1Q '09, most semiconductor wafer companies scaled back drastically in order to survive a long recession,'' said Richard Winegarner, an analyst at Sage Concepts, a research firm.
''Fortunately for them, the remainder of 2009 the market was not as bad as they originally expected. However the decisions to layoff people, close plants, and to move production of sub-300-mm diameter wafers to more cost effective production locations had already been placed in motion,'' he said.
''That said it is a standard industry practice to cry tight supply in order to increase prices. I am pretty sure if you are willing to take wafers from MEMC, LG Siltron, and Covalent Materials, they would be glad to take your order,'' he said. ''However if you want wafers from SEH, Sumco, or Wacker, you will be asked to pay higher prices. After all prices fell very significantly in 2009 and they would like to get some of that price decrease back.''
MEMC recently reported financial results for the quarter ended March 31, 2010. Net sales for the 2010 first quarter were $437.7 million, representing an increase of 23 percent from fourth quarter 2009 net sales of $356.7 million, and an increase of 105 percent from first quarter 2009 net sales of $214.0 million.
The company reported an operating loss of $15.3 million for the quarter, compared to an operating loss of $11.0 million in the 2009 fourth quarter and an operating loss of $26.4 million in the 2009 first quarter.
MEMC's net loss for the 2010 first quarter was $9.6 million, or minus $0.04 per share, compared to a net loss of $7.1 million, or minus $0.03 per share in the 2009 fourth quarter and net income of $2.0 million, or $0.01 per share, in the 2009 first quarter. Results in the 2010 first quarter include a non-cash $5.3 million loss, or $0.02 per share, associated with the valuation adjustment of the Suntech warrants.
Semiconductor materials sales for the 2010 first quarter were $219.3 million, an increase of 5.6 percent from fourth quarter 2009 net sales of $207.7 million, and an increase of 273.6 percent from first quarter 2009 net sales of $58.7 million.
''The sequential increase in sales was the result of higher wafer volumes and modestly higher wafer prices. The year-over-year increase is attributable to significantly higher wafer volume partially offset by lower prices,'' according to MEMC.
Segment operating loss narrowed to $7.9 million in the 2010 first quarter from $9.6 million in the fourth quarter of 2009 and from $73.4 million in the first quarter of 2009.
Solar materials sales for the 2010 first quarter were $157.7 million, an increase of 8.6 percent from fourth quarter 2009 net sales of $145.2 million, and an increase of 1.5 percent from first quarter 2009 net sales of $155.3 million.
Segment operating profit decreased to $12.2 million in the 2010 first quarter from $32.4 million in the fourth quarter of 2009 and from $67.8 million in the first quarter of 2009.
Germany's Wacker Chemie AG recently posted a strong rise in silicon wafer demand during Q1 2010. The division generated total sales of 219.1 million euros, up up 74 percent against the prior-year period. Compared with Q4 2009, Siltronic’s sales grew 19 percent.
Wafer sales by surface area sold tripled year over year. Plant-capacity utilization was correspondingly high, averaging 80 percent. For some product types, plants reached full capacity.
Having posted a negative EBITDA of minus 60.0 million euros in Q1 2009, Siltronic generated EBITDA of 1.2 million euros in Q1 2010.
Amid a loss for the year, Japan's Sumco Corp. is reducing its 200-mm capacity by 20-to-30 percent. The company sales fell 44.3 percent for its fiscal year. At the same time, it is looking to raise prices.