Introduction
The global silicon dioxide market is expected to showcase remarkable growth over the next five years. The market represents strong numbers in terms of consumption and is expected to grow year-on-year. The global silicon dioxide market is highly fragmented with the presence of tier-1, tier-2, and tier-3 players.
Some of the key players operating in the global silicon dioxide market are Evonik Industries AG (Germany), PPG Industries, Inc (US), Cabot Corporation (US), Solvay (Belgium), American Elements (US), Wacker Chemie AG (Germany), Tokuyama Corporation(Japan), Tosoh Corporation (Japan), Gelest, Inc (US), and Aluflor AB (Sweden). The players are focusing on the adoption of expansion strategy on a global level to strengthen their foothold, which is likely to increase the competition amongst them.
Evonik Industries AG (Germany), Wacker Chemie AG (Germany), and Solvay (Belgium) collectively hold the largest share of the global silicon dioxide market. There is intense competition among these players to capture maximum market share.
There is a high degree of competition in the global market with new industry players entering each year. Most of the tier-1 industry participants operating in the market have acquired a substantial market share by offering a broad spectrum of products. Their primary focus is on expansion of the production capacities to reach the desired organizational growth.
Key Development Analysis
Some of the key players in the global silicon dioxide market are Evonik Industries AG, PPG Industries, Inc, Cabot Corporation, Solvay, American Elements, Wacker Chemie AG, Tokuyama Corporation, Tosoh Corporation, Gelest, Inc, and Aluflor AB. These players are focusing on the adoption of growth strategies on a global level to increase their market share in the global silicon dioxide market.
Michael Porter’s five forces model gives a framework that models the global silicon dioxide market. The strategic business managers, trying to create an edge over competitive firms in the global silicon dioxide market can utilize this model to comprehend better industry connection in which the firm operates. The components of each of the forces and the degree of impact of each component in the context of the global silicon dioxide market have been broken down and analyzed.
Threat of New Entrants
New entrants are players willing to enter the global silicon dioxide market. New entrants bring new capacity, willingness to gain market share and often substantial resources. Taking all the past and present global market trends, forces, and scenarios into consideration, the threat of new entrants to the existing players is expected to be moderate to high. This can be attributed to the low capital-intensive nature of the low-grade silica sand industry. The growing construction industry and high demand for glass and ceramics, paints and coatings, adhesives and sealants, and composites are providing lucrative opportunities for the new entrants to enter the silica sand market. However, processing silicon dioxide to higher purity (above 99% SiO2 content) requires high capital and advanced technology, which is expected to act as a barrier for new entrants, and thus lower the threat of new entrants to the existing players. Furthermore, the majority of manufacturers of high purity silicon dioxide are tier-1 and tier-2, which hold the majority of the market share and provide stiff competition to new entrants.
Intensity of Competitive Rivalry
The global silicon dioxide market is likely to witness a low to moderate intensity of competitive rivalry as the global market is fragmented with the presence of a significant number of tier-1, tier-2, and tier-3 players. There are established consumer bases in each region with efficient distribution networks to cater to the demand from end users. Furthermore, long-term contracts with buyers ease the competition to some extent. However, there is some competition among manufacturers based on the quality, variety, and price of the product.
Threat of Substitutes
The threat of substitutes in the global silicon dioxide market is observed to be low–moderate. This is mainly due to the lack of substitutes in the global market on a large-scale. Copper slag is an alternative material used instead of silica sand as a construction additive. However, keeping in mind the high demand of construction materials, copper slag may not be able to replace silica sand at least during the forecast period, however, the silicon dioxide market may witness a marginal decrease in size during the forecast period. Furthermore, there is no substitute for high purity silicon dioxide in the market. However, constant R&D may bring a new substitute in the coming years. But, as of now, the threat to substitute to the global silicon dioxide market is expected to be low–medium.
Bargaining Power of Suppliers
The bargaining power of suppliers is estimated to be low as there is a large number of efficient suppliers in the market. Silicon dioxide finds use in a varying range of applications such as construction materials, glass & ceramics, paints & coatings, adhesives & sealants, food & pharmaceutical additives, silicon wafers, and others. The production cost of silicon dioxide for each application varies drastically, so does the final selling price. Furthermore, there are a large number of suppliers with varying size and provide varying varieties of silicon dioxide. This allows the buyers with switching choices, which increases their bargaining power. Furthermore, the switching cost for silicon dioxide is also low, which also affects the bargaining power of suppliers.
Bargaining Power of Buyers
The bargaining power of buyers is estimated to be high. This is due to a large number of buyers of silicon dioxide. The size of each consignment of silicon dioxide is generally high, which supports the buyers bargaining power. Furthermore, low switching cost, especially for low-grade silicon dioxide, also increases the buyers’ power. However, long-term contracts with suppliers hinder the switching process, and the buyers have to stick to the same supplier and agree to their terms and conditions.
