Silicon Metal (SiMe) is essential to producing polydimethylsiloxane, commonly known as silicone rubber. There is no substitute. Silicon metal refining facilities in China provide roughly 70% of the global output. Most of us in the silicone rubber industry considered it plentiful. However, in September 2021, sudden energy brownouts in China severely affected refining capacity, creating supply bottlenecks. Silicon metal costs jumped by 300%. Although silicon metal production has been full throttle in recent months and costs are now down, the effects on much of the silicone rubber supply chain remains. Major silicone foam, silicone sponge and solid silicone sheet producers have had challenges catching up with demand due to the lack of silicone rubber raw materials. Gasket fabricators, like Stockwell Elastomerics, have not been able to fully support customer requirements for silicone gaskets and materials.
How is silicon metal produced?
The inputs to refining or smelting silicon metal are quartz sand and coke (carbon). The high temperature refining (silicon has a melting point of 2570°F) process is energy intensive – requiring approximately 13,000 kilowatt-hours per ton of silicon metal produced. The major producers have direct access to quartz mines and low cost energy.
What are some of the uses of silicon metal? *
- 25 to 30% of silicon metal output is required to make polycrystalline silicon for the semiconductor and solar industry.
- 45 to 55% of silicon metal is refined for metallurgical grade silicon used to make aluminum alloys or ‘Silumin’ – lightweight and strong metal alloy for the automotive and transportation sectors.
- Only 25 to 30% of silicon metal is further refined through a hydro-metallurgical process to make chemical-grade silicon metal for silicone rubber and silanes.
* Data used for this posting was gathered from various industry reports and resources including OGC Analytics, Research and Markets.
Competing demands for silicon metal
There are 3 growth industries competing for silicon metal refining resources.
- Semiconductor and solar (poly-voltaic cells) will surely increase in demand to support continued growth in electronics and related technology equipment.
- The fast growing electric vehicle industry will require aluminum alloy and semiconductors.
- The silicone rubber industry, forecasting CAGR 7.4% growth from 2022 to 2027 has pent-up demand along with growth prospects.
As the US-based technology sector recovers from the effects of the pandemic and resumes its next round of new product development, the silicone rubber supply chain will be further challenged. This will affect the availability of silicone gaskets and cushioning solutions for ruggedized equipment that are designed to operate in extreme and harsh environments. Gaskets are often the last component specified in the design of technical equipment. Stockwell Elastomerics will be working closely with our channel partners to shore up our silicone supply chain. Even with our best efforts – we see challenges persisting into 2023.
What we see as necessary for stability and growth
It is time to push for a public-private partnership (PPP) to secure the domestic supply chain with enough silicon metal refining capacity to support domestic semiconductor production capacity and an additional silicone monomer facility. The aerospace, defense and technology sectors of the US economy and US security requires this action.
The March 31, 2022 Memorandum on Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as amended to encourage on-shoring of semiconductors is an example of what is possible: Defense Production Act announcement.
On behalf of the hundreds of customers we have been unable to supply with silicone rubber materials, I intend to press on.
As we make progress, I will provide updates.
– Bill Stockwell
Chairman and Chief Technology Officer