• ASSO
• 2022-12-03
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Expert opinion: Nitrogen Trifluoride (NF3)

Expert opinion of ASSO International Consulting: How will the expansion cycle of semiconductors impact the Nitrogen Trifluoride (NF3) industry?

Nitrogen trifluoride is the inorganic compound with the formula NF3. This nitrogen-fluorine compound is a colorless, odorless, nonflammable gas. Nitrogen trifluoride is an extremely important semiconductor gas and one of the most used semiconductor gases. NF3 is used in a relatively small number of industrial processes. It is primarily produced in the manufacture of semiconductors and LCD (Liquid Crystal Display) panels, and certain types of solar panels and chemical lasers. To the extent that these processes occur in your company’s direct operations or value chain, they may need to be reflected in future inventories to ensure conformance with GHG Protocol standards.

Figure Nitrogen Trifluoride (NF3) Product

Source: ASSO International Consulting

Analyst Lukes of ASSO International Consulting pointed out that the global demand for nitrogen trifluoride will exceed 90,000 tons by 2030, and its main production areas are located in China, Japan and South Korea. The current market demand is about 50,000 tons. Globally, the Nitrogen Trifluoride (NF3) industry market is high concentrated as the manufacturing technology of Nitrogen Trifluoride (NF3) is relatively matures. And some enterprises, like SK Materials, Hyosung, Kanto Denka Kogyo, Versum Materials, PERIC, etc. are well-known for the wonderful performance of their Nitrogen Trifluoride (NF3) and related services.
 
A sea change is occurring in the semiconductor industry. Once notorious for boom and bust cycles that revolved around demand for a few consumer devices, the chip industry now powers most aspects of our economy. This proliferation, in our view, will smooth steep cycles and drive durable demand, even as the economy slows and recession risk increases. Yet chip stocks still trade at a discount based on the cyclicality of the 1990s and 2000s. Historically, semiconductor manufacturing ran in boom and bust cycles correlated with global GDP growth: Insatiable demand for a consumer product – such as PCs in the 1980s, mobile phones in the 2000s, and smartphones in the 2010s – would lead manufacturers to aggressively expand capacity.
 
Recently, semiconductors have become nearly ubiquitous, a key component in numerous industrial applications, leaving the industry far less vulnerable to single retail end markets. Many of these new end markets – including autos, industrial automation, 5G infrastructure, artificial intelligence, and cloud computing – require more chips per unit and have longer cycles than consumer electronics, lessening the industry’s reliance on consumer spending and potentially smoothing revenue. One of the fastest growing markets is likely to be automotive. An electric vehicle currently uses more than twice the number of semiconductors when compared to its internal combustion engine ICE predecessor, and industry experts expect this gap to widen.

Figure Nitrogen Trifluoride (NF3) Production by Regions (Ton) (2017-2030)

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