Semiconductor Fabricators are Working Through Global FFKM Shortages
The decade began with a semiconductor shortage that made the world acutely aware of how critical these tiny components are in many aspects of everyday life and for most sectors of the economy. Demand for semiconductors skyrocketed driven by a pandemic-led rise in remote work, distance learning, gaming, entertainment, internet shopping, data analytics, and soaring sales of vehicles, and will continue to grow, doubling the global chip market to over $1 trillion by 2030.
Keeping up with this demand, however, has been complicated by a different shortage - the limited availability of small but critical components required by the chip fabrication process: chip fabrication processes depend on the FFKM (perfluoroelastomer) O-rings, gaskets, and other seals that can stand up to the extremely high temperatures and aggressive chemicals while controlling particulate excursions that cause contamination.
Unsurprisingly, this has triggered an even higher demand for FFKM seals already popular in the semiconductor industry. While most manufacturers are expanding capacity as quickly as possible, demand continues to outpace supply - further increasing the need for FFKM materials and leading to shortages. The current global shortage of FFKM is caused by limitations in the supply of raw materials occurring at the same time as the acceleration in demand for FFKM products.
Causes of the Global Supply Shortages
First let's look at the supply constraints. The global supply of raw material feedstocks necessary for FFKM production has been severely limited by two factors - environmental restrictions and geo-political events.
Increasing environmental restrictions
Environmental and regulatory agencies around the world have been tightening regulations on several industrial products and manufacturing processes around the world that directly impact FFKM production.
Restrictions on per- and poly-fluoroalkyl substances (PFAS), with more complex and stringent regulations, have been squeezing availability for several years. Some of the FFKM suppliers have either had plants shut down or lines interrupted by regulators. In response, PFAS suppliers for FFKM production are in midst of multi-year processes of engineering fluorosurfactants out of their manufacturing processes.
Tetrafluoroethylene (TFE) a fluorocarbon with the chemical formula C2F4 is a raw material used in all FFKM. It is extremely dangerous to handle. Therefore, the time-consuming process of engineering, siting, and permitting makes it difficult for existing facilities to expand capacity and poses very barriers to entry for new facilities.
In 2022, the Russia-Ukraine conflict has exacerbated supply shortages. FFKM formulations are extremely unique and require a multitude of specific chemistries working in unison to create the final formulation. Some of those unique chemistries are constrained due to the technologies only being available in areas impacted by the Russia-Ukraine conflict.