The market for silicon metal is anticipated to expand at a CAGR of 5.5% during the forecast period of 2023 and 2030. Silicon metal is utilized in numerous industries. In the chemical industry, it is utilized to produce silicon compounds and silicon wafers for use in photovoltaic solar cells, electronic semiconductors, and other applications. Silicon metal is also used extensively in the manufacturing of aluminum alloys. In 2021, the demand for silicon metals expanded alongside the demand for technological goods in several countries. The growing use of smart mobile phones, computers, tablets, and other electronic devices is anticipated to boost the silicon metal market over the research period.
Both the industrial and consumer sectors rely heavily on silicon metal because it serves as the foundation for countless items. The vast majority of silicon metal produced today is employed in the production of aluminum alloys, accounting for the majority of output. Aluminum alloys are utilized in the production of both automobiles and aircraft. Silicon enhances the alloy's tensile strength, castability, and brittleness, allowing it to be used for a wider variety of high-performance components. Silicon demand in the transportation industry has increased substantially due to the increased usage of aluminum-based materials in favor of heavy steel or iron components in automotive applications. Consequently, the market expansion is predicted to accelerate throughout the projection period.
In addition, the availability of a significant aluminum alloy production base will increase the growth rate of the silicon metal industry. Moreover, the expanding solar and semiconductor sectors will contribute to the expansion of market value. In controlled environments, silicon metal is an exceptional insulator and provides the necessary conductivity. The market is expanding as a result of the rising concentration of defense and aerospace elastomers business owners and other industry experts trying to enhance silicon metal-enabled technologies. The lightweight aircraft trend, which will continue to affect business growth during the projection period, is driving the market expansion of the silicon metal sector. It is projected that the growth of the building and construction industry will also contribute to the expansion of the market.
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Automobile manufacturers are emphasizing the production of fuel-efficient automobiles and the reduction of greenhouse gas emissions. Due to its corrosion resistance, low wear rates, and low thermal expansion, aluminum-silicon alloy is best suited to meet these specifications. The OICA forecasts that car production will reach 80,145,988 units in 2021, representing a 3% rise from the 2020 figure. To reduce the amount of electricity necessary to power the engine of an electric automobile, vehicle designs must become significantly lighter. According to the New Policies Scenario of the International Energy Agency, global sales of electric vehicles would approach 125 million by 2030. (Excluding two- and three-wheeled vehicles). As a result, the increased demand for electric vehicles and the expansion of automobile production will raise the demand for aluminum-silicon alloys, which in turn will boost the demand for silicon metals.
As a result of the various improvements made by market participants and the enormous investments made in research and development to improve product applications, market participants will have access to attractive opportunities during the period from 2023 to 2030. In addition, the rising emphasis of manufacturers on sustainability and cost-effectiveness will force innovators to develop more innovative and cost-effective methods of silicon production, contributing to the market's future growth.
The SAF's energy needs absorb a substantial amount of its working capital. In addition, the price of labor and transportation boost production costs. This material is particularly energy-intensive due to the energy-intensive purifying procedure necessary to produce silicon metal. In addition to electrodes, the synthesis of silicon metal requires coal, quartz, natural gas, or petroleum. Therefore, the high production costs of silicon metal limit the market expansion of silicon metal.
China's constraints on energy use have decreased silicon metal manufacturing, resulting in a decline in silicon output. From January to September of 2021, silicon metal production increased by 39% annually. Despite this, it cannot be denied that Q4 output was reduced as a result of the inadequate power supply. Therefore, this factor will inhibit the silicon metal market's growth rate.
By product type, the global silicon metal market is divided into metallurgical grade silicon metal and chemical grade silicon metal. In 2021, the automobile and construction sectors generated the most income, therefore the metallurgical grade of silicon metal dominated the product segment.
Aluminum led the market in 2021, accounting for more than 40.0% of total revenue. The product is used as a fortifier and alloying agent in the production of aluminum. Due to its light weight and ability to reduce emissions, the stringent pollution regulations imposed on automakers around the world are expected to enhance the demand for automotive aluminum. This pressure on automakers will undoubtedly boost the segment in the coming years. In addition to the production of aluminum alloys, the majority of silicon metal output is utilized to manufacture silicones. Silicones are synthetic polymers used in a variety of end-use industries, such as construction and building, automotive and transportation, and healthcare. The increased demand for silicones, especially in developing economies, is expected to contribute to the rise of the category. The solar and semiconductor application segment is anticipated to exhibit the greatest revenue CAGR of 5.5% between 2023 and 2030. Silicon metal is used to create polycrystalline silicon, a crucial raw material for the production of photovoltaic cells in the solar industry and semiconductors in the electronics industry.
Asia-Pacific dominated the market and generated 40% of the revenue in 2021. This major component is related to China's huge aluminum and silicone production facilities. In addition, China is the greatest producer of silicon metal in the world. Since the Chinese market is oversupplied, China exports a considerable amount of its output. However, the proportion of exports has fallen in recent years due to sustained demand from local sectors. China's top electric vehicle manufacturers include Tesla, BYD Co., and Nio Inc. The Chinese government plans to have at least five thousand fuel-cell electric vehicles by 2025, and one million by 2030. During the forecast period, the market is predicted to be driven by the government's backing of electric, hybrid, and fuel-cell electric vehicles. In the United States, the increasing demand for electric vehicles drives the markets for aluminum alloys, silicon adhesives, and semiconductors. China is the largest semiconductor manufacturing and consumption market in the Asia-Pacific region. The location is perfect for investments in the production of mobile phones, laptops, and other electronic devices.
Europe's silicon metal market is dominated by the silicon sector, in contrast to other regions where aluminum manufacture is the primary end-use industry for the commodity. Europe is one of the world's main silicone producers, and as a result, European silicone manufacturers see a large demand for the material. During the projection period, revenue in North America is anticipated to expand at a CAGR of 3.6%. The pandemic has also had a negative influence on the region's aluminum industry, and as a result, the country's silicon metal market has been considerably harmed. Increasing electric vehicle adoption is predicted to be the key market driver in the region over the long term.
It is projected that market participants will explore solar businesses in an effort to increase revenue. As solar energy achieves grid parity and installation simplicity, polysilicon production is predicted to become the world's preferred energy source. However, fluctuating silicon prices and decreasing margins as a result of an oversupply provide a significant challenge for suppliers. Hoshine Silicon Industry Co. Ltd, Ferroglobe, Elkem, Dow, and Wacker Chem. AG is among the silicon metal industry's market leaders.
