The economic impact of the Covid-19 pandemic has been devasting to the global economy. During most recessions the more typical or normal behaviour is for consumers to cut spending on discretionary items including technology goods and for businesses to delay investment in new PCs, equipment, to conserve cash and wait for capacity utilisation to recover.
However, in the Covid-19 recession, we are witnessing new norms, including lockdowns, work-from-home, and remote education, which all contribute to a spike in technology spending. In comparison, we are seeing the largest reductions in real GDP come from declines in services (travel and entertainment, discretionary activities).
The growth in technology spending is driven by virtual connectivity. This has been essential in the era of Covid-19 as it is facilitating continuity for our everyday existence during pandemic. From this expanding use of virtual interactions for daily needs such as education, business continuity, government operations, ordering food, and socialisation there has been a growing cognisance that semiconductor technology is a key enabler for connecting people during this time of restricted travelling and social distancing.
Historically there is a strong linkage between the impact of a recession on consumer spending. It is typical to see consumer spending on technology goods drop during a recession. The historical nature of this trend is illustrated above, during previous recessions – shaded in grey.
This growth in virtual connectivity has led to a surge in demand for semiconductors. Specifically, the surge is driven by growth in demand for the most advanced chips. These chips are made at the most leading edge nodes in semiconductor plants (fabs) using 300mm wafers. Helium is a key gas utilised in these advanced semiconductor wafer fab operations. The major uses of helium in advanced semiconductor applications include carrier gases, specialty gas blends, load lock cooling, backside wafer cooling, and leak testing for vacuum systems. As the number of advanced 300mm semiconductor plants increases, the demand for helium will also increase. It should be noted that some segments of the semiconductor industry are not faring as well at this time. Softer segments of the semiconductor industry, include chips for automotive applications, and these chips are typically made in older, 200mm semiconductor plants, which do not use as much helium as the 300mm counterparts.
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