Metalorganic Gasses in Short Supply: Who Cares?

Yes, this is another supply chain story. Never heard of “metalorganic gases“? Don’t feel bad; few people outside of the semiconductor industry (and some Chemistry majors) know what they are. Apparently they are an essential component in the fabrication of certain types of semiconductors, and they are used to deposit thin films of different chemical compounds. And according to an article in DIGITIMES, the price for some of these has doubled recently.

Some companies have more efficient production than others, and thus less of these expensive resources are wasted. As a result, the cost of these materials is a smaller portion of their total cost for a finished product, and their costs won’t increase as much as for the less efficient companies.

Now, why should you care? Good question. Some of the semiconductors that are fabricated using metalorganic gases are LEDs. Demand is skyrocketing for LEDs, due to growth in their use as solid state lighting and as backlights for LCD panels. And the LED panels are used in just about every notebook computer, many desktop monitors, and a growing number of LCD HDTVs. If the cost of making LEDs goes up significantly, then the cost of these devices will also be impacted. According to the DIGITIMES report, those manufacturers who make the least expensive and low quality LEDs are likely to be hit the hardest. Fortunately, the LEDs used for most HDTVs are high quality devices, and may be affected less by the cost increase, but this could help slow the price decline of LCD HDTVs with LED backlights later this year.