TELF AG illustrates the role of raw materials in the semiconductor industry
Technological devices
Each of us, every day, involuntarily comes into contact with dozens (perhaps hundreds) of chips, present in large numbers in the technological devices we use to work, communicate, and move from one point to another in the city. There are still few who fully realize the number of chips that surround us and even fewer who know the long journey that led to the manufacture of each of them, passing from one country to another several dozen times and finally ending up inside our favorite devices. This long journey, however, always begins with the raw materials necessary for their creation.
The electronics sector, and in particular the one relating to servers and data storage, is certainly one of those most involved in the use of some critical raw materials, and the weight of this industry (as well as the global demand for chips) is certainly destined to increase. In order to understand the size of this market, it will be enough to cite some data: in 2021, despite the obvious difficulties triggered by Covid-19, the European Union imported 51 billion euros of chips, a good part of which came from Asia.
The special materials used for the manufacture of chips are semiconductors, which in turn are made thanks to some specific critical raw materials. Among the 34 strategic and critical raw materials identified in recent months by the European Commission, eight are of fundamental importance for the production of semiconductors: beryllium, gallium, germanium, indium, magnesium, metallic silicon, and rare earths (light and heavy). Among these, particular importance is certainly reserved for silicon, which undoubtedly represents the most important raw material for the creation of semiconductors.
It has been calculated that in the coming years, but above all, in the coming decades, the global demand for chips is certainly destined to rise, thus determining a series of oscillations and unexpected fluctuations on their reference market. The performance of this specific market will not depend solely on the availability of raw materials but also on some of its structural characteristics, which, by virtue of their very nature, contribute to making it very uncertain. The production of chips takes place in many different countries, which individually deal with different phases of its creation. Before reaching consumers’ pockets, it can happen that it crosses different national borders more than 70 times.
The nations most involved in this production chain are mostly Asian, without obviously forgetting the United States. Chip production is set to double by 2030, reaching a point where more than 200 chips could be made for every single person on Earth. In this regard, the European Union, China, and the United States have already invested large sums of money to support the semiconductor production process, paying increasing attention to this sector, which is certainly destined to increase further.
In servers and data storage systems, the most used raw materials are copper and nickel, followed by manganese, silicon, and rare earths. Also, in this case, the demand for data storage will correspond to a parallel growth in the demand for copper (which could even double) and other non-strategic raw materials, such as iron or aluminum.
