In recent years, the global demand for semiconductors, solar panels, 5G technologies, and emerging markets has surged, leading to an increased demand for silicon raw materials. Silicon is a crucial component in the production of semiconductors and solar panels, and as the demand for these technologies increases, so does the demand for silicon. However, this increase in demand has created supply chain issues and has led to a rise in raw material prices.
The demand for semiconductors has been driven by the growth of emerging markets, especially in the Asia-Pacific region. According to a report by McKinsey, China accounts for 50% of global semiconductor demand. Moreover, the rise of 5G technology and the increasing adoption of electric vehicles have further contributed to the demand for semiconductors.
Similarly, the demand for solar panels has been driven by the growing need for renewable energy sources. Countries like China, India, and the United States have been investing heavily in solar power, leading to a surge in demand for solar panels. The increasing demand for silicon in the production of solar panels has put further pressure on the supply chain.
The largest producers of silicon raw materials by volume are China, Russia, and the United States. However, global instability, including trade tensions and the COVID-19 pandemic, has affected the production and supply of silicon raw materials. This has resulted in a rise in raw material prices, leading to a vast increase in electronic component pricing and delivery schedules.
To address these issues, it is crucial to work with customers to foresee future supply chain issues and price rises. By doing so, manufacturers can proactively plan and manage their supply chains, minimizing the impact of any disruptions. Moreover, companies should consider diversifying their supplier base to mitigate supply chain risks.
In response to the increasing demand for silicon, Brunel University London has launched a €10m plan to strengthen Europe’s silicon supply. The project, named Silicon Impulse, aims to develop new methods of producing silicon that are more sustainable and cost-effective. The project also aims to improve the efficiency of silicon-based products, such as solar panels and semiconductors, while reducing their environmental impact.
In conclusion, the global demand for semiconductors, solar panels, 5G technologies, and emerging markets has led to an increased demand for silicon raw materials. This demand, combined with global instability, has created supply chain issues and a rise in raw material prices. To mitigate these issues, it is crucial to work with customers to foresee future supply chain issues and price rises and to consider diversifying the supplier base. Additionally, initiatives like the Silicon Impulse project at Brunel University London can help strengthen Europe’s silicon supply and improve the sustainability and efficiency of silicon-based products.