Increasing consumer electronics sales and the move toward larger wafer diameters currently drives the world wafers markets. The increased buying power of consumers in the Asian region as well as an increased interest in feature-rich products fuels the demand of consumer electronics products.

"Consumer electronic products such as PDAs, notebooks, mobile phones, LCD displays and DVD players are increasingly incorporating silicon, silicon on insulator (SOI), and compound semiconductor-based devices in them, which in turn, contributes to the revenue growth of the world wafers markets," says Frost & Sullivan Research Analyst Jagadeesh Sampath. "A key trend in this market is the growth instigated by solar application. Currently, in terms of revenues, the contribution of solar application is very little but, in terms of growth, it has very high potential."

The Asia Pacific region, especially China, has the potential to become the major mass producer of silicon wafers and chips. Other regions such as North America, Japan, and Europe expect to witness huge competition from the Asia Pacific region during the forecast period and beyond.

Recently, the world wafers markets have witnessed a shortage in bulk material, which has led to a steep increase in the price of raw material in the last two years. The raw material prices for silicon wafers went up from $20 per kg to $250 per kg, which has resulted in wafer manufacturers increasing the wafer prices for all diameters.

"Also, international pricing of germanium (Ge) has been the major factor contributing to the very high cost of Ge wafers; from $570 to $590 per kg in 2006 it is expected to increase to $620 to $650 per kg during the forecast period," explains Sampath. "Therefore, as the raw material price goes up, the pricing of Ge wafers is expected to shoot up significantly thus hindering revenue growth."

However, the world wafers markets will benefit from growing consumer interest toward the latest generation of game consoles. The microprocessors utilized in the latest gaming devices such as PS3 and Xbox360 use SOI wafer technology. Given that SOI technology offers high efficiency for advanced high performance gaming applications, this technology has great potential for market growth.