Gartner Dataquest sees the potential for market expansion and “bold decisions”


Gartner Dataquest has been conducting research on the SOI wafer market trend since 1995. Its results indicate that SOI wafer demand achieved a compound annual growth rate (CAGR) of 33% over the decade between 1995 and 2005.

In particular, the principal thin film segment enjoys strong growth recently due to the burgeoning consumer electronics demand, including video games, as well as a major drive from data processing applications. Likewise, the thick film segment also experiences healthy growth partly because of successful exploration of new applications such as PDP drivers and automotive applications.
Gartner Dataquest has been conducting research on the SOI wafer market trend since 1995. Its results indicate that SOI wafer demand achieved a compound annual growth rate (CAGR) of 33% over the decade between 1995 and 2005.

In particular, the principal thin film segment enjoys strong growth recently due to the burgeoning consumer electronics demand, including video games, as well as a major drive from data processing applications. Likewise, the thick film segment also experiences healthy growth partly because of successful exploration of new applications such as PDP drivers and automotive applications.

Driving adopters

While leading-edge device vendors, such as IBM and AMD, firmly maintain their position as early adopters of SOI technology, the short-term outlook suggests that the activities of these companies will drive the SOI market, even if a major event does not occur.

On the other hand, for the SOI wafer market to enter a fully-fledged stage in the medium and long run (after 2008), adoption by vendors with volume consumption (so-called “early majority”) is essential as the second wave of propagation following the early adopters. While early adopters are ready to accept any obstacle — regardless of its extent or scale — and work with it to find a solution, because they have established their dominance in the market, early majority vendors with volume consumption are reluctant to introduce a new technology unless its advantage or prospect becomes visibly clear.

In fact, this constitutes a chasm between the two groups of vendors. Filling such a chasm to encourage technology adoption by early majority vendors requires further technology innovation, such as significant cost reduction, and a clear move for market formation to help establish a competitive advantage in a particular domain. Gartner Dataquest has made the scenario forecast based on the wave of vendors’ movement.

Innovation wild card

Figure 1 shows SOI wafer demand forecast under each scenario. Under the most likely scenario, SOI wafer demand will be driven by early adopters in 2006 and 2007, with the annual growth rate exceeding 40% each. In 2008 and afterwards, it will go over the peak and the growth rate will enter the downtrend. The most likely scenario forecast indicates that SOI wafer demand will achieve a CAGR of 31% between 2005 and 2010, totaling 243.7 MSIs in 2010, including captive demand.

A key point in estimating the market outlook is, unlike ordinary market forecast, the fact that “innovation” that can achieve a breakthrough in the market expansion process will likely play an important role, while it is difficult to forecast the emergence of such innovation accurately.

In particular, in expansion of leading-edge technology markets such as SOI wafer, the supply of key leading-edge technology and the creation of innovation by the “lead user” can achieve a (unexpected) breakthrough, as proposed by Professor E. V. Hippel of MIT Sloan School of Management, which can then often lead to market expansion. In this context, SOI technology can be considered to have significant market potential.

Bold attitudes

Also, for successful commercialization of new technology or market expansion, other factors than technology issues, such as creating product planning and marketing, also play a critical role. To promote the development of a breakthrough technology or significant market expansion, bold decisions and endeavors under proper risk management is essential and care should be taken not to fall into a myopic conservatism. The development of SOI technology and business, which continue since 1995, is said to be the outcome of “bold decisions and endeavors” mostly led by European and American semiconductor vendors. It is expected that such bold attitudes will become pervasive among Japanese and Asia/Pacific counterparts.

Leave a Reply

Your email address will not be published. Required fields are marked *