The Asian helium market in 2017 reached 52.8 million m3 total for Japan, South Korea, Taiwan and China, investigations made by The Gas Review found.
According to US Intelligas Consulting, the global market stands at 168 million m3 (approx six million f3), which gives Asia around 30% of the market. It goes without saying that China is the growth engine. For the past five years, helium has grown in China at an annual rate of 5% to 13% to reach a market scale of 21.6 million m3 in 2017. The three major applications – semiconductors, optical fibres and MRI – all exist in this market, which is similar to Japan. However, it has twice the scale, giving it a presence that surpasses Japan. Of helium distributors, the four global major industrial gas companies hold semiconductor trade rights, such as Air Liquide, Linde, Praxair and Air Products, and vie with each other for market shares. However, when Linde and Praxair merge, they are expected to take the lead. Japanese companies Taiyo Nippon Sanso and Iwatani also participate in this market with an estimated total share of 20% to 30%. South Korea has the global semiconductor manufacturers Samsung Electronics and SK hynix, with the main helium application being in semiconductors. South Korea had a comparable helium market with Japan around 2010, but from 2012 the Japanese market has shrunk somewhat. So by 2017, the South Korean market has completely outperformed Japan. The 2017 market scale was 12.1 million m3, adding one million m3 to the previous year. Helium supply in South Korea is controlled by the global industrial gas majors, who monopolise semiconductor trade rights, with Air Products and Praxair holding comparatively high market shares. The two Japanese companies also supply South Korea, but they are positioned as minor suppliers. In Taiwan, just as in South Korea, semiconductor manufacturers such as Taiwan Semiconductor Manufacturing (TSMC), United Micrelectronics (UMC), Micron Technology and Powerchup Technology, consume the largest quantities of helium. The market scale suddenly expanded in the 2010s and reached 8.3 million m3 in 2017. It is said Air Products is the strongest supplier.
Attention to be focussed on Chinese semiconductor industry and USA-China trade wars
It is assumed the helium market will continue to grow in South Korea, Taiwan and China, and the semiconductor industry in China is likely to form the centre of that market. The Chinese government is promoting the Made in China 2025 strategic plan to produce high-tech products made completely in China by 2025. A large government-administered fund has been created to aid in capital investments in the high-tech industry. Semiconductors are specified for priority assistance. Behind this policy is the $230bn worth of semiconductors that China currently imprts. The problem is particularly serious for semiconductors with wiring pitches of 28nm or less, which are used in smartphones and tablet computers, because Chinese semiconductor manufacturers cannot make. China is perceived to rely on importing all of them. China’s domestic demand for smartphones and tablets continues to increase, making domestic production of semiconductors an urgent issue. The main investments appear to be shifting from foreign to Chinese capital. Up to now, it was foreign companies, such as Samsung Electronics, Intel, TSMC, and Globalfoundries, who pushed up the helium demand by building plants and increasing capacity in China. But from now on, it is thought that these companies will be replaced by Yangtze Memory Technologies (YMTC), Innotron Memory and Fujian Jinhua Integrated Circuit (JHICC), which are being supported by the Chinese Government. YMTC is currently rapidly developing manufacturing technology for NAND flash memory devices, Innotron Memory for DRAM devices for smartphones and JHICC for special DRAM devices. All three companies are targeting the start of full scale manufacturing by 2019. However, recently, these moves face the US-China trade wars. The Trump administration in the US intends to prohibit the sale of semiconductors to China by US corporations, to prevent Chinese funds from purchasing US semiconductor device manufacturers, and to take other steps. These plans are having a large impact on the semiconductor policies of the Chinese Government and have drawn the attention of parties involved in helium business.
Asian market: 59 million m3
The Asian market, including Japan, South Korea, Taiwan and China, totalled 59 million m3 in 2017. This represents 35% of the global market and surpasses the largest market in the world, the US (54 million m3) The largest market in Asia is India at 3.3 million m3 due to their MRI and optical fibre business, followed by Singapore at 1.8 million m3 with their semiconductor industry, including Micron Technology and Globalfoundries. Singapore serves as a helium distribution centre for the major gas companies. Companies like Air Liquide and Praxair gasify and fill helium helium to cylinder in Singapore and then distribute them to adjacent Malaysia and Indonesia. Thailand, Indonesia and Vietnam, known for remarkable growth as ASEAN-member countries, still have only small helium markets. For these countries, automobiles and household electric appliances are the centre of industry, and helium is principally used for leak testing. Singapore, Malaysia and similar countries also have a local characteristic in that helium is mainly used for scuba diving. Helium is mixed with the compressed air that divers use for natural resource development and marine construction. They say demand requires supplying helium in bundles of cylinders.
In East Java of Indonesia, it is thought that in cooperation with the local gas company, Air Liquide built a new helium filling station last year. Manufacturing companies are concentrated at Surabaya of East Java, and it is assumed that the move is aimed at stabilising supply of helium.
Two Japanese companies that centre their Asian business in China
Taiyo Nippon Sanso and Iwatani are the only two Japanese countries to develop helium business in Asia. Taiyo Nippon Sanso has directly affiliated filling centres in three locations in China (Fushun, Shanghai and Chongqing), three in India (Delhi, Chennai and Pune), and one in Australia (Sydney). It also has joint-venture filling centres in Thailand, Indonesia and Singapore. These centres are used for helium business throughout Asia. Taiyo Nippon Sanso has no directly affiliated filling centres in South Korea, but it does supply liquid containers to local filling companies. According to Shunichi Anzou, global helium/bulk strategy manager in their International Business Division, Taiyo Nippon Sanso has a high sales share in the Asian market only in India and Thailand. They are top in India with a 45% share and second after Linde with a 35% share in Thailand. They are strong in the Indian market because they entered it reasonably early. Manager Anzou said, “Asia now represents more than 50% of our global helium business. We have also obtained new, more interests in Russia, and we plan to continue to expand our Asian business. However, our strategy calls for increased profits rather than increased sales or market share. We want to give priority to the stable, effective and efficient supply of only rare gases.” Iwantani has two directly affiliated filling centres in China (Jiaxing and Xi’an, with Xi’an currently under construction) and one in Malaysia (Senai in Johor State). The filling centre in Malaysia was opened with the cooperation of the leading local gas company Southern Industrial Gas (SIG). Iwatani uses the centre in Malaysia to supply helium products to dewars and cylinders to Malaysia, Singapore, Thailand, Vietnam, Indonesia and elsewhere. In addition, Iwatani has built partnerships with local filling companies in China, South Korea and Taiwan to acquire liquid container customers. Their business tie-ups with gas companies in Guangdong and Shandong as well as above mentioned two directly affiliated filling centres in China gives them four supply centres for the Chinese market, North, South, East and West. From this year, India has been added to their business strategy for partnerships with local companies. Just recently, Iwatani has signed a supply contract with a leading gas company for liquid containers in India. That company is currently building a filling centre near Mumbai. Iwatani has scheduled autumn their year as the start of liquid helium supply. In the Asian market, Iwatani has a high sales share in Malaysia. Shinichi Hasimoto, General Manager of Helium Gases Department of Industrial Gases & Machinery Business Group at Iwatani, said their 40% share makes them the top supplier in Malaysia. However, because Malaysia’s market is still small, he said, “It will take some time before business in Malaysia has an impact on our business overall.” He continued, “The growth market in Asia is in China and we think of China as the centre for Iwatani helium business, both for capital investment and for strengthening sales. We currently have about a 15% to 20% share in China, but increasing market share without regards to profit is meaningless. China and India were previously considered low price markets, but the helium market both in China and India has quickly become a seller’s market, so we will be emphasising profitability in addition to our traditional active position in developing customers.”
The Gas Review, issue no. 455