Silicon on Insulator Market Trends

Growth Drivers

• Rising demand for energy-efficient semiconductors: The transition to low-power electronics is a primary driver for SOI adoption, especially through FD-SOI technology. FD-SOI allows up to 40% lower power consumption as compared to traditional bulk CMOS, making it suitable for battery-powered devices like smartphones, IoT sensors, and wearables. As energy efficiency becomes a design priority in all electronics sectors, the advantages of FD-SOI in minimizing leakage current and optimizing thermal performance continue to support demand.
• Expansion of 5G and advanced RF applications: The expansion of 5G infrastructure worldwide is significantly boosting the adoption of Radio Frequency SOI (RF-SOI). According to a report by 5G Americas, with 2.25 billion 5G connections globally in 2024, the global wireless telecommunications sector reached a significant milestone. RF-SOI substrates offer extremely superior signal quality and integration for RF front-end modules used in 5G smartphones and base stations. The scalability and efficiency of RF-SOI make it a foundational technology for high-frequency communication systems.
• Rising adoption in automotive and industrial sectors: SOI's built-in radiation hardness and thermal stability make it ideal for harsh environments such as automotive and industrial systems. In Advanced Driver Assistance Systems (ADAS), electric vehicles, and Micro-Electro-Mechanical Systems (MEMS), SOI provides high reliability under severe conditions.  For instance, auto manufacturers such as BMW, Ford, Mercedes-Benz (Daimler Chrysler), GM, and VW are using SOI based chips in autonomous driving, infotainment, and automotive networking protocols. In January 2023, Mercedes-Benz partnered with Wolfspeed to deliver silicon carbide power semiconductors. Wolfspeed's SiC semiconductors will be utilized by Mercedes-Benz in the electric vehicles' future platform drive systems.

Challenges

• High manufacturing costs: The high production cost of SOI wafers compared to conventional bulk silicon wafers is a significant challenge to the SOI market. SOI manufacturing includes complex processes such as Smart Cut, SIMOX, and wafer bonding, all of which require specialized equipment, precision engineering, and high-purity materials. These processes significantly increase the capital and cost of operational expenditures. This pricing gap restricts adoption in cost-sensitive segments such as entry-level consumer electronics or emerging market devices. Furthermore, the limited number of SOI wafer suppliers worldwide, such as Soitec and Shin-Etsu, contributes to supply constraints and pricing rigidity, making it harder for new entrants or small-scale manufacturers to compete effectively.
• Complexity in fabrication and design: Creating integrated circuits on SOI substrates adds further complications as compared with bulk silicon processes. In addition, not all design teams or foundries have the skill sets, nor do they have the EDA tool capabilities, to realize all those benefits. Blue Chip organizations see these hurdles as risks that contribute to falling back into bulk technologies. Addressing and simplifying the SOI design ecosystem will be key for organizations that truly want to change and embrace SOI.