While the semiconductor industry grew just 3% last year to reach $256bn, the global market for semiconductor materials market grew 14% in 2007 to amass $42bn, marking its fourth year of record revenues, according to the Semiconductor Equipment and Materials International (SEMI) industry association.

The wafer fabrication materials and packaging sectors showed growth with increases of 17% or $25bn and 9% or $17bn, respectively, SEMI reported.

At the same time, Japan continues to dominate worldwide semiconductor materials consumption at a 22% share of the global market thanks to its wafer fab and packaging base, with such a voracious demand driving the requirement for industrial gases as part of the materials supply. Taiwan held onto the number two spot in terms of consumption of semiconductor materials for the past four years driven by strong growth in wafer foundries and packaging subcontractors.

Dan Tracy, Senior Director of industry research and statistics at SEMI, explained in a statement “As the semiconductor companies continue to ship record amounts of units, demand for materials is increasing, as well. Heightened demand in addition to the tight supply for various gases, silicon, and the widespread adoption of advanced packaging technologies are resulting in very strong revenue growth for semiconductor materials suppliers.”

The Rest of World region (ROW), which includes Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets, claims the number three spot in the materials market due to packaging materials according to SEMI, while the semiconductor materials market in China is growing at the fastest rate - given the new capacity coming on-line from a previously small base.