The semiconductor equipment market consists of various tools and devices required for manufacturing integrated circuits, semiconductors, and other components. Some key products include lithography systems, wafer processing equipment, metrology systems, and crystal growing systems. There is growing demand for advanced semiconductor devices across various industries like electronics, automotive, healthcare, and telecommunications. Miniaturization of devices and the need for improved performance is driving semiconductor manufacturers to invest in newer fabrication technologies.
The global semiconductor equipment market is estimated to be valued at US$ 95.97 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period of 2024 to 2031.
Key Takeaways
Key players operating in the Semiconductor Equipment are Northrop Grumman Corporation, BAE Systems, Lockheed Martin Corporation, Clearpath Robotics Inc., John Bean Technologies Corporation, ECA Group, Israel Aerospace Industries Ltd., Endeavor (Now a part of FLIR system), Harris Corporation, and General Dynamics. The demand for semiconductor devices is growing exponentially due to proliferation of consumer electronics and adoption of IoT. This is prompting equipment manufacturers to develop more advanced lithography, deposition, etching, and metrology tools. Major technology trends include EUV lithography, advanced packaging, and metrology solutions based on machine learning.
Market Trends
Miniaturization of semiconductor devices is a key trend as it allows for development of smaller and powerful electronics. This is driving the need for newer lithography technologies like EUV with higher resolution. Another major trend is the shift towards packaging technologies like 2.5D and 3D stacking to address issues of processor speed and connectivity. This has increased demand for backend equipment and inspection systems.
Market Opportunities
Growing applications of Semiconductor Equipment Market Demand in automotive, healthcare and other industries present significant opportunities for equipment suppliers. This includes developing tools for new advanced nodes of 5nm and below. There is also scope for equipment manufacturers to offer integrated solutions combining multiple process steps rather than standalone tools. Developing MEMS fabrication equipment for niche applications like sensors can unlock new growth opportunities.
Impact of COVID-19 on Semiconductor Equipment Market Growth
The COVID-19 pandemic severely impacted the semiconductor equipment market growth globally. During the initial outbreak, manufacturing activities were halted as lockdowns were imposed across major economies. This led to disruptions in the supply chain and demand decline. Component shortages affected the production of chips used in various end-use industries like automotive, consumer electronics, etc. However, as lockdowns were relaxed in late 2020, the market started recovering gradually.
The pandemic accelerated digital transformation across sectors. Work from home practices increased the demand for laptops, smartphones, networking equipment driving chip requirements. The growth of 5G networks and advancement in technologies like AI, machine learning, IoT also aided market recovery. The increasing demand for semiconductor chips from automotive industry adopted advanced driver-assistance systems and infotainment protocols further supported market growth.
To cater to the rising demand, chip manufacturers increased their capital expenditure on advanced manufacturing equipment, lithography systems, metrology devices. The supply chain stabilized as logistical constraints were addressed. Several governments announced incentives to boost local chip manufacturing attracting new wafer fabrication facilities. The semiconductor equipment market is poised to grow further in the coming years driven by increased investments in advanced technologies, new applications, and regional self-sufficiency programs.
Geographical Regions with High Semiconductor Equipment Market Value
Asia Pacific dominated the market in terms of value, accounting for over 50% share owing to the presence of leading wafer fabrication hubs in countries like Taiwan, South Korea, China, and Japan. Majority of global foundries, IDMs, and OSAT companies have their manufacturing facilities in the region to cater to rising regional chip demand. The increasing number of fabs along with capacity expansions are driving equipment procurement in APAC.
North America is the fastest growing region on account of new fabs commissioned by Intel, TSMC, Samsung, and investments under CHIPS Act. The act aims to catalyze US$52 billion of semiconductor investments and research creating a vibrant domestic supply chain. European Union is also emerging as an important fabrication destination supported by public-private partnerships to boost regional chip self-sufficiency and address the ongoing supply issues.
Geographical Region with Fastest Growing Semiconductor Equipment Market
North America region is expected to witness the fastest growth in the semiconductor equipment market during the forecast period on account of increasing investments to develop domestic semiconductor manufacturing capabilities. Governments across U.S. and Canada are offering attractive incentives under programs like CHIPS act and Strategic Innovation Fund to attract major OSATs, foundries, and IDMs.
Some key factors fueling fastest growth in the North America region include- new MEMS fab commissioned by STMicroelectronics in Syracuse, New York expanding 300mm wafer capacity, Intel's $20 billion investment in Ohio and Arizona fabs, TSMC and Samsung selecting sites in Arizona for new fabs, GlobalFoundries expanding its Malta, New York fab and investments from ON Semiconductor and SkyWater Technology. The growth of 5G/6G infrastructure and adoption of EVs are also driving regional chip demand supporting equipment procurement.
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