The raw material is cheap (sand is mostly silicon). The purity levels are the expensive part. Here's a quote from Wikipedia:
"Silicon is commercially prepared by the heating of high-purity silica in an electric arc furnace using carbon electrodes. At temperatures over 1900<C, the carbon reduces the silica to silicon according to the chemical equation<p>
SiO2 + C ¨ Si + CO2
Liquid silicon collects in the bottom of the furnace, and is then drained and cooled. The silicon produced via this process is called metallurgical grade silicon and is at least 99% pure. In 1997, metallurgical grade silicon cost about $ 0.50 per g; in 2000, silicon metal (> 99% pure silicon) averaged 56 cents per pound [1] (http://minerals.usgs.gov/minerals/pubs/commodity/silicon/760301.pdf).
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Purification
The use of silicon in semiconductor devices demands a much greater purity than afforded by metallurgical grade silicon. Historically, a number of methods have been used to produce high-purity silicon.
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Physical methods
Early silicon purification techniques were based on the fact that if silicon is melted and re-solidified, the last parts of the mass to solidify contain most of the impurities. The earliest method of silicon purification, first described in 1919 and used on a limited basis to make radar components during World War II, involved crushing metallurgical grade silicon and then partially dissolving the silicon powder in an acid. When crushed, the silicon cracked so that the weaker impurity-rich regions were on the outside of the resulting grains of silicon. As a result, the impurity-rich silicon was the first to be dissolved when treated with acid, leaving behind a more pure product.
In zone melting, the first silicon purification method to be widely used industrially, rods of metallurgical grade silicon are heated to melt at one end. Then, the heater is slowly moved down the length of the rod, keeping a small length of the rod molten as the silicon cools and resolidifies behind it. Since most impurities tend to remain in the molten region rather than resolidify, when the process is complete, most of the impurities in the rod will have been moved into the end that was the last to be melted. This end is then cut off and discarded, and the process repeated if a still higher purity was desired.
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Chemical methods
Today, silicon is instead purified by converting it to a silicon compound that can be more easily purified than silicon itself, and then converting that silicon compound back into pure silicon. Trichlorosilane is the silicon compound most commonly used as the intermediate, although silicon tetrachloride and silane are also used. When these gases are blown over silicon at high temperature, they decompose to high-purity silicon.
In the Siemens process, high-purity silicon rods are exposed to trichlorosilane at 1150<C. The trichlorosilane gas decomposes and deposits additional silicon onto the rods, enlarging them according to chemical reactions like<p>
2 HSiCl3 ¨ Si + 2 HCl + SiCl4
Silicon produced from this and similar processes is called polycrystalline silicon. Polycrystalline silicon typically has impurity levels of 1 part per billion or less.
At one time, DuPont produced ultrapure silicon by reacting silicon tetrachloride with high-purity zinc vapors at 950<C, producing silicon according to the chemical equation<p>
SiCl4 + 2 Zn ¨ Si + 2 ZnCl2
However, this technique was plagued with practical problems (such as the zinc chloride byproduct solidifying and clogging lines) and was eventually abandoned in favor of the Siemens process."
So, to summarize, all of these processes use extremem high temperatures in "clean room" conditions to produce silicon that has less than one part per billion contaminant. It's both difficult and expensive to make anything that pure, even water. Then once you get it pure, you cut the ingot into wafers and lose ~40% of your super duper pure silicon as sawdust.
Then you tediously put conductive traces and leads on them, and enclose them in expensive iron free glass, etc.
Oh yeah, they also want to make a little profit in there somewhere.
That's why they're expensive. Though in real terms (accounting for inflation) they have gotten considerably cheaper in the last ten years. The recent price hike is because europe and asia see the handwriting on the wall and are actually trying to do something before energy costs skyrocket. In a competitive market, high demand usually means higher cost. The bonus is production often ramps up in respons to high demand with subsequent price drops. So in the long view, this little price spike may actually be a good thing.
Best regards,
troy
