The U.S. export controls like imposing of stringent tariffs on imports are expected to reduce the proportion of revenue from the Chinese market, which in turn has impacted Fused Silica prices.

Key Takeaways:

• Fused Silica prices decreased in both China and India in January 2025.
• The price drop in China was primarily due to limited transportation capacity because of Chinese New Year.
• Intra-Asian freight rates were the main factors behind the price decrease in India.

The US has long maintained technological and economic dominance, but as Chinese semiconductors enter the global market, China’s influence is growing as the Chinese manufacturers like SMIC have ramped up production of semiconductors, turning this segment into a key area for domestic localization.

In January 2025, Fused Silica market in China and India saw a decline in prices, influenced by moderate to low downstream demand from industries such as semiconductor, electronics, and foundry sectors, along with stable supply conditions. Chinese Fused Silica prices, FOB Shanghai, fell by 1.6%, while Indian Fused Silica CFR JNPT recorded a sharper 6% decrease. These fluctuations reflect the evolving regional market landscape and the impact of broader geopolitical and economic factors on material pricing. 

The decline in Fused Silica prices in China was driven by a slowdown in capital expenditure within the semiconductor sector, despite continued growth in semiconductor demand. According to Commercial Times, this deceleration in spending, coupled with seasonal factors like reduced operations ahead of the Chinese New Year, led to slower procurement and lower transaction volumes. Limited road transport capacity and stockpiling further pressured prices, resulting in a temporary oversupply of Fused Silica in the market.

However, this trend is likely to ease moderately in February 2025 in the Asian market due to stable supply conditions and post-holiday market adjustments.

Similarly, in India, the Fused Silica market witnessed a steeper decline, driven by lower import costs from China and easing intra-Asian freight rates. The gradual stabilization of global supply chains helped reduce logistical expenses, leading to lower landed costs for imported materials. This decline in transportation costs were a key factor in driving down the price of Fused Silica in India. 

Despite India's ongoing initiatives to attract global semiconductor investments and establish local production facilities, the country remains highly dependent on imports for high-purity raw materials. The recent easing of Fused Silica prices provides short-term relief to Indian manufacturers, helping to offset input costs.

Our analysts predict that lower intra-Asian freight costs are expected to support moderate price reductions in India, though currency fluctuations and raw material pricing may introduce some volatility, contributing to a softer but uncertain market outlook for Fused Silica.

In China, manufacturing activity is likely to remain subdued early in the month, with demand recovery lagging as factories gradually resume operations. Weak capital expenditure in the semiconductor sector may keep prices under pressure, though stabilization later in the month could limit further declines.