Semiconductor Gases Market Size, Share & COVID-19 Impact Analysis, By Product (Electronic Special Gas and Electronic Bulk Gas), Application (Memory, Logic, and Others), and Regional Forecast, 2022-2029

The global semiconductor gases market size was valued at USD 8.71 billion in 2021. The market is projected to grow from USD 9.36 billion in 2022 to USD 15.56 billion by 2029, exhibiting a CAGR of 7.5% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with products witnessing experiencing lower than anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 4.0% in 2020 as compared to 2019.

Semiconductor gases are used in semiconductor processing. These semiconductor gases can be further bifurcated into two major segments, such as electronic bulk gases and electronic special gases. Few of these gases include industrial gases such as argon, carbon dioxide, helium; hydrogen, nitrogen, and oxygen in their purest form, while others include gases such as nitrogen fluoride that are exclusively produced for the electronic manufacturing sector. Semiconductor chips are at the center of any modern electronic device, enabling developments in communications, computing, healthcare, military systems, and the transportation sector, among others.

In addition, future technologies such as quantum computing, artificial intelligence, and advanced wireless networks such as 5G are enabled by advancements in leading-edge semiconductor technologies. Semiconductor gases play a critical role in the majority of the steps involved in semiconductor manufacturing. This includes steps such as deposition, lithography, etching, doping, annealing, and chamber cleaning, among others. As semiconductor manufacturing becomes more sophisticated, demand for high-purity gases used to manufacture these advanced semiconductor chips is likely to rise simultaneously.

COVID-19 IMPACT

Supply Chain Disruptions Due to Lockdown Restrictions Influenced Market Growth

The lockdown restrictions imposed by several countries across the globe caused supply chain disruptions throughout the semiconductor industry. This has resulted in raw material shortages, logistics delays, and other unseen issues. Even though the demand for semiconductors remained high in the midst of the pandemic. The supply side was not able to match the increased demand, resulting in shortages of semiconductor chips. This in turn has negatively affected different dependent industries, especially the automotive and electronics sectors. This is evident from the fact that the shortage of automotive semiconductors forced major automakers across the globe to temporarily shut down their production lines or even switch to measures such as removing features such as heated seats in vehicles.

Amid the COVID-19 restrictions, other parallel events such as the trade disputes between the China-U.S. and the Russia-Ukraine war have resulted in increased market instability. Owing to this, the manufacturing companies faced challenges such as logistical delays, fluctuating demand, and extended production downtime. Semiconductor raw material materials such as gases and other chemical compounds witnessed significant price fluctuations due to supply shortages, and a few of the issues still persists in some regions. The semiconductor industry is expected to witness expansion in localized production, with rising reliance on domestic suppliers for raw materials, instead of a single major supplier. 

LATEST TRENDS

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Rising Demand for Semiconductors from Electric Vehicles Sector to Drive Semiconductor Gases Market Growth

The semiconductors have become a prevalent part of modern life and are at the centre of any technology that enables today’s electronic devices. Over the past few decades, the growing digitalization trend across different industries has led to an increase in demand for semiconductors. The global automotive industry is also part of the digitalization trend, with conventional IC engine-based vehicles having a much higher number of processors and microcontrollers to control every other minor function. The number of electronic components such as sensors, touchscreens and power electronics, used in an electric vehicle is significantly higher than that used in any conventional IC powered vehicle.

As the global auto industry rides on the electric wave, demand for semiconductors is anticipated to increase several folds during the forecast period. This global transition towards electric vehicles in turn is likely to provide an exponential boost to semiconductor manufacturing, and in turn generate higher demand for raw materials such as high purity semiconductor gases, that play a critical role at every step during the manufacturing process. Thus, rising demand from the electric mobility sector is expected to drive market growth.

DRIVING FACTORS

Surging Demand from Consumer Electronics Industry to Thrive Market Growth

The rapid technological advancement over the past few decades have made consumer electronics such as smart phones, tablets and wearable electronics, much more affordable for masses. This trend is likely to continue during the forecast period, resulting in wider adoption of these consumer electronic devices. As of April 2021, according to the data published by the World Bank, the number of individuals using the internet across the world has been growing rapidly over the past few years. More than 60% of the world’s total population is using internet and this number is anticipated to increase in coming years owing to rising internet accessibility. In addition, recent advancements in the supporting technologies such as 5G and IoT are likely to ramp up demand for consumer electronics.

For instance, there is been a rising trend of adoption of smart interconnected household electronics that have integrated advanced technologies such as machine learning and artificial intelligence. Semiconductor gases play a crucial role in manufacturing of high-end semiconductors that enable development of these consumer electronics. Thus, rising demand of consumer electronic industry is likely to benefit and drive market growth.

RESTRAINING FACTORS

Rising Environmental Concerns and Adoption of Stricter Regulations to Hamper Market Growth

Few of the gases used during fabrication of semiconductors are considered to be the worst polluting materials and hazardous to individuals and the environment. For example, this includes fluorinated gases that are widely used during manufacturing steps such as etching, chemical vapor deposition and chamber cleaning, among others. The hazards associated with these types of gases can be categorized into fire, explosion and contaminant based on the threats they impose. In order to ensure the health and safety of employees and to protect the workplace from accidental damage, companies need to maintain regulatory compliance. This translates to additional costs for installation of equipment such as scrubbers and other facilities to treat gas emissions.

Another option that manufacturing companies can explore is to use alternative greener gases. For instance, Air Liquide has introduced a line of alternative etching gases that have lower global warming impacts. However, switching to alternative gases can be a capital-intensive process. Governments across the globe are enforcing stringent standards to limit hazardous greenhouse gases emitted during semiconductor production owing to rising concerns for the environment and public health. These new standards are likely to affect companies using these semiconductor gases. Thus, adoption of stricter health and environmental regulations is expected to hinder market growth.

SEGMENTATION

By Product Analysis

Electronic Special Gas Segment to Account for a Notable Share Owing to Growing Precision Required in Semiconductor Manufacturing Sector

Based on product, the market is segmented into Electronic Special Gas and Electronic Bulk Gas.

In 2021, the electronic special gas segment dominated the market. Few of these special electronic gases, such as nitrogen fluoride, are exclusively produced for the electronic manufacturing sector. As the semiconductor manufacturing industry transitions towards producing advanced leading edge semiconductors with sizes less than 5 micrometers, demand for gases and chemicals that can deliver precise results is anticipated to expand. These gases are typically classified as special electronic gases. Thus, rising demand for high density advanced semiconductor chips is expected to create demand for electronic special gases.

By Application Analysis

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Logic Segment to Hold a Significant Share Owing Increasing Demand in High Computation Electronic Devices

In terms of Application, the market is segmented into Memory, Logic and Others.

The logic segment accounted for the major share of the market. The logic chips are considered as the brains of any electronic device. These chips are used in the manufacturing of high computation devices such as CPUs, GPUs and NPUs. With the advancements in new technologies that need high computing ability to process machine learning algorithms, demand for logic chips is anticipated to expand exponentially during the forecast period. In addition, advancements in IoT and 5G technologies are anticipated to profit and augment market growth.

REGIONAL INSIGHTS

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Asia Pacific accounted for a major market share in 2021. The region is likely to maintain its position during the forecast period owing to rising demand from its expanding semiconductor-manufacturing sector. The majority of global consumption is concentrated in the Asia Pacific, with countries such as Taiwan leading as a dominant consumer owing to their robust semiconductor-manufacturing sector. The country has been a leader in semiconductor chip manufacturing and the country continues to invest heavily in expanding its current production capacity. Other countries such as China, South Korea and Japan are also expected to increase their semiconductor production capacities during the forecast period in order to meet the rising demand. This in turn is likely to increase the demand for semiconductor gases.

The rising relevance of the semiconductor industry and the critical role it can play in today’s geopolitics has made countries across the world rethink their stance on in-house domestic production. Even though semiconductor technology was primarily developed in the U.S., its production share has declined from around 37% in 1990 to approximately 12%. The recent shortage of semiconductors caused due to pandemic has reiterated the importance of domestic production of semiconductors. In order to reduce reliance on foreign suppliers, the U.S. has been taking proactive steps towards increasing domestic production. For instance, the U.S. Congress has recently passed the CHIPS Act. This Act includes investment tax credits, semiconductor manufacturing grants and research investments for chip manufacturing. The production of semiconductor chips is anticipated to increase during the forecast period. This in turn is expected to benefit and drive semiconductor gases market share.

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In terms of production capacity, the status of the European semiconductor industry is similar to that of the U.S. semiconductor industry. The region is home to the most R&D intensive semiconductor sector. However, the European Union has shifted its focus towards domestic production and is aiming to increase its share in global semiconductor production. For instance, in order to address the semiconductor chip shortage, the EU announced a European Chips Act on February 2022. This act is expected to facilitate construction of infrastructure to support rising demand, attract new investments and create a conducive environment for new talent. Due to rising government initiatives, the semiconductor manufacturing sector in the region is likely to thrive during the forecast period. This in turn is anticipated to create new opportunities for market growth.

KEY INDUSTRY PLAYERS

Tactical Planning Implemented by Companies to Reinforce Their Market Share

The tolerance for impurities within the semiconductor industry is very low. The companies supplying gases for semiconductor manufacturers need to ensure ultra-high purity of gases. The market is dominated by a few major market players owing to the high technical expertise and investments required to achieve desired purity of gases. Furthermore, the companies operating in this market have been expanding their production capacities in order to match the growing demand from the semiconductor manufacturing sector.

The major companies operating in this market include Air Liquide, Air Products and Chemicals, Inc., Linde plc, Solvay and SHOWA DENKO K.K., among other players. The major key players in the market have been actively consolidating to reduce the overall competition. Numerous other companies, such as Iwatani Corporation, MATHESON TRI-GAS, INC., American Gas Products, Electronic Fluorocarbons, LLC, SUMITOMO SEIKA CHEMICALS CO., LTD. and Taiyo Nippon Sanso JFP Corporation, are among other active participants in the market.

LIST OF KEY COMPANIES PROFILED:

• Air Liquide (France)


• Air Products and Chemicals, Inc. (U.S.)


• Linde plc (U.K.)


• Solvay (Belgium)


• Iwatani Corporation (Japan)


• Messer Group (Germany)


• American Gas Products (U.S.)


• Electronic Fluorocarbons, LLC (U.S.)


• SUMITOMO SEIKA CHEMICALS CO.,LTD. (Japan)


• Taiyo Nippon Sanso JFP Corporation (Japan)


• SHOWA DENKO K.K. (Japan)

KEY INDUSTRY DEVELOPMENTS:

• July 2022 – Iwatani Corporation has signed a deal with Helious Specialty Gases, an Indian specialty gas company.  This will make Helious the first company to have three helium transfill facilities in India. The company also plans to be a leading supplier of helium within the country, catering major OEM’s.


• July 2022 – SK Materials and Showa Denko has signed a MoU on business cooperation for producing special gases used in semiconductor chip manufacturing processes. Considering the rising demand from semiconductors, two companies plan to build a factory in the U.S. that will produce high-purity gases in North America.


• May 2022 – Air Products San Fu Co. Ltd recently brought two new air separation units onstream, as part of the long-term agreements to provide ultra-high purity industrial gases to one of the world's largest semiconductor manufacturers in Asia.


• April 2022 – Air Products has announced to invest around 900 million USD in a number of onsite plants in Taiwan. The company has agreed to supply high purity gases such as nitrogen, oxygen, argon and hydrogen to an undisclosed semiconductor manufacturer in Taiwan.


• September 2021 – Linde group announced to have signed a long-term agreement with prominent semiconductor manufacturers based in Phoenix, Arizona. As per the agreement, Linde has agreed to supply ultra-high-purity gases such as nitrogen, oxygen and argon to the customer. In order to do this Linde has announced to build, own and operate a complex of on-site plants.

REPORT COVERAGE

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The research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, products, and products. Also, it offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years. It further includes historical data & forecasts revenue growth at global, regional, and country levels and analyzes the industry's latest market dynamics and opportunities.

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