AGC Chemicals Americas looking to harness semiconductor growth potential

KNOXVILLE, Tenn.—When the U.S. semiconductor industry finds its traction and really expands production countrywide, AGC Chemicals Americas Inc. plans to be there.

The Exton, Pa.-based firm is branching out a bit, adding a business development office in Cupertino, Calif. The move gives it a stronger West Coast presence and better positions it to take advantage of opportunities for its fluoropolymer solutions, used in the manufacturing of wafers.

"That (the Silicon Valley area) is the hub for semiconductor and electronics in the U.S., and those are target markets for us for business development and growth," Jason LaBorde, AGC Chemicals Americas sales and marketing manager, said during a conversation on the 2022 International Elastomer Conference show floor in Knoxville. "So we are putting resources where the activity is to better grow in those markets."

Considering the projections for the semiconductor industry, AGC is eyeing a lucrative market.

McKinsey & Co., in an article published to its website April 1, noted that the semiconductor market hit the $600 billion mark in 2021. And with an aggregate annual growth rate of between 6 and 8 percent through 2030, the industry is poised to eclipse the $1 trillion mark by the end of the decade.

Deloitte concurs the market is growing quickly. The analysis firm expects that, by the end of 2022, the semiconductor market will have grown 10 percent or more globally, easily eclipsing the $600 billion mark for the first time. In the years ahead, this growth will continue, driven by investments from major microchip makers as they work to grow capacity at what Deloitte calls "an unprecedented level."

Meanwhile, capital expenditures from the three largest players (made between 2021 and 2023) should exceed the $200 billion mark, with government further backing the efforts with funding of their own. By the end of 2023, Deloitte said, global wafer starts should be 50 percent higher than they were in 2020.

And the U.S. will see some of that investment as well.

President Biden Aug. 9 signed the bipartisan CHIPS and Science Act, which pledges to provide more than $52 billion in government subsidies for U.S. semiconductor research, design and production. A White House fact sheet issued the day Biden signed the bill noted that, since Jan. 20, companies had pledged $150 billion to expand microchip production in the U.S.

"More and more chips are being made," LaBorde said. "The U.S. has announced well over a dozen fabs are coming into the U.S. We are bringing a lot of it back and trying to get away from the chip shortage problem that we ran into (during and after the pandemic.) Now, (chips) are going to be made here in the states, and we are focusing on growing with those new additions."

One reason AGC is positioned to serve the burgeoning semiconductor industry is that it offers exactly the right materials. Specifically, AGC offers well-engineered FFKMs, ultra-low metal materials for sealing applications during the wafer manufacturing process, according to Innovation Engineering Manager David Lavanga.

"When you are fabricating and growing the silicone wafer, you want to minimize contamination in the chamber," Lavanga said " … They (FFKMs) need to be resistant to the plasmas used. And there are many different combinations of plasmas."

But AGC Chemical does something else that could allow it to take advantage of growth opportunities in the U.S.—in the semiconductor industry and beyond. When it comes to material development, AGC is always forward-thinking, Lavanga said.

"It's proactive R&D," Lavanga said. "So, besides the voice of the customer for requirements, we are talking about developing next generation (of materials) ahead of the need (for them)."

And those material developments could drive some additional growth for AGC, particularly in microchip and semiconductor adjacent industries where AGC has an established presence. For instance, demand for the company's fluoropolymer materials is rising in the electronics and wire and cable spaces.

"Fluropolymers is a mature market, but the semiconductor portion of it is growing, and that is where there are new opportunities to utilize materials that have been around for awhile," LaBorde said.