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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (33076)	9/30/1998 3:39:00 PM
From: eabDad	Respond to of 132070

tippet: <Do you have any data on the growth of demand in polysilicon?> Capacity of the industry in 1994-95 was about 11 metric tons. Demand broke through 11 in late 94, on its way to just over 15 by '97. <Are there only a few firms that mine it and is it mined in conjunction with other metals?> <The pinch as you call it was due only to mfr capacity? In your opinion was it an explosion in demand or loss of capacity that caused the pinch at that time -- if demand, what was the primary driver?> Not sure of the mining issue, but that's not where the problem was. The problem was in the purification capacity, which produces the poly material. The wafer guys keep 2-3 months of inventory on hand to prevent disruptions in wafer supply. Starting in late 1994, those inventories started to be drawn down. Production capacity did not catch up to demand until late 1996, so inventories got down to 10-14 day levels at the low point in 1996. Inventories under 1 month will generally lead to a disruption in wafer production because the inventory is not evenly distributed among wafer suppliers. The wafer guys were taking extraordinary measures to meet shipments, including recycling of waste parts, etc. Production in 1997 got above 16 metric tons, greater than demand, so inventories started recovering. They enetered "safe" levels by the end of 1997, and now stand at about 2.5-3 months again today. The primary driver for this cycle is the wafer size conversion to 200mm wafers. Chip guys consume increasing "silicon area" and there is more raw polysilicon material used per square mm of silicon area in 200mm wafers over 150mm wafers because the wafers are thicker, among other things. I would expect the next polysilicon pinch like this to occur during the transition to 300mm wafers early next decade. It's pretty predictable, really. Z