Quest for thinner wafers and wires ramp up tungsten diamond wire application

Slicing is one of the core procedures of wafer manufacturing. With outstanding performance in cost reduction, making larger, thinner wafers becomes a common pursuit of the wafer sector. Polysilicon prices stay elevated over recent two years, accelerating the development of thinner wafers. In 2017, a comprehensive substitution of mortar wires with diamond wires indicated a clear way for the advancement and cost reduction of wafer slicing technology.

As installed PV capacity surged over the last two years, polysilicon prices rose monthly on short supply in 2021 and has held above RMB 200/kg for more than a year. InfoLink expects polysilicon prices to stay elevated this year until the fourth quarter, when the shortage eases. Prices will sustain above RMB 200/kg until the third quarter next year when most production expansion projects yield substantial output.

Rising polysilicon prices build up wafer production costs. To bring cost under control, wafer manufacturers ramp up wafer thinning process. From 2018 to 2020, manufacturers spent three years, only to pare down thickness by 5μm. However, since 2021, wafer thickness has been thinned down by 15μm and may reduce further.

Given lofty polysilicon prices, it is the most direct and effective for wafer manufacturers to reduce production costs by mitigating polysilicon consumption. One way of doing that is making thinner wafers, and using thinner diamond wires is another.

In the first half of 2021, the diameter of diamond wire came in mostly at 42-47μm. The figure now sits at 36-40μm. Some manufacturers even use 32μm tungsten diamond wires as core wires to further reduce polysilicon usage.

InfoLink expects the world to add at least 239 GW of installed PV capacity in 2022. The installation pushes demand for wafers to surge. As a primary wafer BOM, diamond wire is bound to see demand increase evidently. Moreover, the amount of abrasive particle per unit is reduced as diamond wire becomes thinner. According to website of Qingdao Gaoce Technology, the cutting edge rate of a 43-μm electroplated diamond wire is 180±30 grit/mm, and it declines to merely 140±30grit/mm for a 37-μm electroplated diamond wire. The decrease in cutting edge rate caused significant increase in wire consumption per piece.

Wire consumption sits at 3.5-4m/piece for 182mm wafers, and 4.8-5.3mm/piece for 210mm wafers. The two translate to 0.46-0.53m of wire consumption, based on which, 500,000km of wires/GW are estimated to be used throughout 2022. The figure is expected to increase by 50,000km/GW every year, as wires get thinner.

Rising installed PV capacity and the development of thinner wires contribute to a greater increase in diamond wire demand in 2022 than in 2021. This year, demand for diamond wires may reach 150 million km and exceed 250 million km by 2030.

Presently, most diamond wires use high carbon steel wires as core wires. The high carbon steel wires and such application are originated in developed countries, such as the U.S. and Japan. Most competitive diamond wire suppliers are from Japan and the U.S., such as Asahi, Nakamura, and DMT, which are world-leading diamond wire manufacturers.

From 2017 onwards, with the rise of Chinese diamond wire suppliers and the fast progress of import substitution, Chinese manufacturers reclaim nearly an 100% dominance over the diamond wire market. For now, the diamond wire supply chain is in a state of "one superpower, many great powers." Metro has secured more than 50% of market share for many successive years, whilst Gaoce, Planetec, Yuanshi, and Jiangsu Resource Fusion Diamond Technology all post at least one million km of monthly supply.

Source: public data compiled and industrial investigation by InfoLink

Theoretically, there had been 158 million km of diamond wire production capacity as of the end of 2021, fulfilling annual demand of 2022. As manufacturers expand, theoretical production capacity may reach beyond 300 million by the end of this year.

Listed companies account for 67,000,000km of diamond wire supply in 2021, whilst Yuanshi and Resource Fusion purportedly contributed 25,000,000km. As shown in the table above, all manufacturers amassed 92,000,000km of supply, on par with the 90,000,000 km demand in 2021.

Dimond wires mostly compose of 92c and 100c wires. 35-μm and 36-μm electroplated diamond wires must have at least 5.3N and 5.8N of breaking force, respectively. To ensure enough tensile force and residual tension fluctuation, the gauge of a standard high carbon steel wire is around 35μm. Presently, the gauge of steel wires used to slice wafers is very close to 35um but can hardly be thinned down further.

Tungsten wires, with stronger breaking force, receive more and more attentions. Advantages of tungsten wires include:

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Currently limited supply for PV tungsten wires sends up prices for tungsten core lines, which comes in four to five times more expensive than regular ones. As a result, tungsten diamond wires are two to three times more expansive than regular ones. Tungsten diamond wire is more expensive, but its smaller gauge helps reduces kerf-loss effectively. Given high polysilicon prices, tungsten wires, with greater breaking force, is still a better choice, despite higher likelihood of wire-breakages due to smaller gauge. Tungsten diamond wire also reduces wire loss by 10%.

Wire consumption may be further reduced by increasing the amount of every roll of wires to at least 100km per roll. A cost assessment for slicing G12 wafers finds, provided with RMB 300/kg of polysilicon prices and RMB 90/km of prices for tungsten diamond wires, there is still RMB 0.04/piece of cost advantage. Given current prices for diamond wires, slicing costs of using tungsten diamond wires and regular diamond wires are pretty much the same for polysilicon prices that sit at around RMB 240/kg.

According to the graph above, the more expensive polysilicon is, the more advantaged tungsten diamond wire becomes. In the future, when prices for regular diamond wires and polysilicon drops, manufacturers of tungsten diamond wires can cut prices and make thinner wires to secure their advantage.

Granting that both 36-μm regular diamond wires and 30-μm tungsten wires can be used to slice G12 wafers, tungsten diamond wires will still enjoy cost advantage even when prices for which declined to RMB 80/km and polysilicon prices hold above RMB 80/kg. Moreover, there's bigger room for the thickness of tungsten diamond wires to be reduced further, potentially reaching under 30μm.

Major core wire suppliers include Matsushita, Xiamen Tungsten Co., Ltd, and China Tungsten. Subject to small-scale production capacities, companies that can mass produce tungsten diamond wires are Resource Fusion. Metron, Dialine, and Yuanshi yields output in smaller volume, whilst other manufacturers are gearing up for the business. Later, a total of 70 billion meters of production capacity expansions of Xiamen Tungsten Co., Ltd and China Tungsten will come online, providing for 120-140 GW of demand for electroplating diamond wires.

The biggest difference between using tungsten and regular diamond wires as core wires is that, on the surface of tungsten wires, there are thick oxide coating and colloidal graphite generated during production. The two must be removed before a tungsten wire is used, to ensure adhesion of the nickel-phosphorus disposition. However, the removal takes more time than the production of diamond wires, and the removal rate is relatively low. Theses technical issues complicates the transition from regular diamond wires to tungsten ones.

Making large-format wafers and diamond wires thinner have been a long-term pursuit of wafer manufacturing, which is accelerated by lofty polysilicon prices. As carbon steel wire reaches its limit in terms of performance and thickness reduction, tungsten wire, with stronger breaking force, is widely recognized as the next-gen material for core wires of diamond wires.

Subject to core wire supply, actual production volume of tungsten diamond wires is limited. Later, a total of 70 billion meters of production capacity expansions of Xiamen Tungsten Co., Ltd and China Tungsten will come online, providing for 120-140 GW of demand for electroplating diamond wires. The use of tungsten diamond wires will increase in 2023, as polysilicon prices stay relatively high.

Tungsten diamond wire is better for slicing wafers but attributes little in reducing production costs. Subject to PV tungsten wire supply, carbon steel wires will remain the mainstream material for core wires of diamond wires in the coming one to two years.

The replacement of regular carbon steel wire with tungsten diamond wire will come faster, if manufacturers can produce thinner, cheaper tungsten wires, leveraging its advantage in the slicing segment, and expand production capacity of tungsten diamond wires and PV tungsten core wires.