The price of the bulk materials gases nitrogen trifluoride (NF3) and silane (SiH4) is on the rise worldwide. In spite of the fact that specialty gas is essential for the fabrication processes of semiconductors and LCDs, the users have been strongly urging a reduction in price again and again. The prices of these gases have fallen into a trend toward weakening. Especially for nitrogen trifluoride and silane, which are consumed in large quantities, gas producers are entering this field one after another causing oversupply, so that prices are continuing to plunge.

In addition to these, the method of supply is switching over to the large ISO containers. The burden of installation amounting to 20-30 million is piling up, and added to this is the rise in the price of energy. These rebound back onto the price of production and distribution, causing a worsening of profitability.

However, the slump in large LCD panels and in thin film silicon solar cells (the 2012 Shock) which occurred in the period from 2011 to 2012 became a turning point. The project at the Sharp plant in Sakai, which had been supposed to bring about a huge annual consumption of several thousand tons of nitrogen trifluoride and 1,000 tons of silane fell through completely in the end. Aiming at this huge demand, producers of nitrogen trifluoride and silane had been vigorously expanding or setting up new facilities but they were totally betrayed by the 2012 Shock. For silane, the situation was greatly affected when two companies, Taiyo Nippon Sanso, and Air Products, gave up their position as producers. For nitrogen trifluoride as well, Kanto Denka Kogyo and OCI Materials indeed got burned as they had expanded their production facilities.

In early 2013, the operation ratios of the factories producing semiconductors and LCDs set out on the road to recovery, and the demand for gas too bottomed out. However, calling it price cooperation, the demand on the part of the users for a decrease in price simply rose. Amidst this, on August 18 of last year a fire broke out at the silane production line at Plant #2 in Yeongju of the Korean firm OCI Materials. The local authorities issued an order to cease operation, and currently at the end of this August the line was still not in operation.

Although the shortage of silane did not come about right away due to this, a sense of a tightness in supply has been gradually increasing since early this year. The largest producer of silane, REC Silicon, implemented a thorough price revision worldwide, with rising energy costs as a reason. Producers in Japan too have transferred the rising electric power fees onto their pricing.

For nitrogen trifluoride, the Anderson Plant of the US firm ADC and Ulsan plant of the Korean firm Foosung ceased operation. The reason for this was deteriorating profitability. Major gas producers are heading toward thinking again about their production lines or cancelling their plans for expansion to resolve their surplus supply situation even just a little. This is because the sales price of nitrogen trifluoride is continuing to plunge amidst the sharpening of competition going on worldwide. Another reason behind this is that instances have appeared whereby companies are barely turning any profit at all or are going into the red.

Also the prices are skyrocketing of fluorite and hydrofluoric acid (HF) which are the raw materials for the fluorine type gases. This is dealing a direct blow to nitrogen trifluoride which is the area of the greatest demand for these. ISO containers have become the one used the most as means of mass supply. With the worsening of the turnover ratio of the containers, the burden of amortization has come to weigh heavily on the situation. Of course, added to all of this is the rising of the cost of energy. Nitrogen trifluoride producers both in Japan and abroad have therefore embarked on a price correction.

Wanting to avoid the 2012 Shock again companies are showing a very prudent stance regarding expansion of production facilities for nitrogen trifluoride. As of this time, the view is that long as they look at production capacity and the amount of consumption, the situation of overproduction has not been resolved. Also, if they do not increase production capacity, supply and demand should be in balance around next year or the year after.

For example, looked at from the point of view of nitrogen trifluoride, the demand for the 2014 period is estimated to be around 1,400 tons, but the supply capacity is around 1,600 tons. It is also estimated that the growth is around 15% a year. If this growth ratio is maintained as is, the view is that supply should equal demand in 2016.