Semiconductor Manufacturing Equipment Market Size, Share & Industry, By Equipment Type (Front-end Equipment, Back-end Equipment), By Dimension (2D, 2.5D, 3D), By Application (Semiconductor Fabrication Plant/Foundry, Semiconductor Electronics Manufacturing, Test Home), and Regional Forecast, 2022-2029

The global semiconductor manufacturing equipment market is estimated to grow from USD 111.66 billion in 2023 to USD 237.57 billion by 2031; it is expected to record a CAGR of 9.9% during the forecast period. Based on our analysis, the global market exhibited a decline of -6.4% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, with semiconductor manufacturing equipment experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels.

Semiconductor manufacturing equipment is used to manufacture semiconductor wafers, IC chips, memory chips, circuits, and others. Silicon wafer manufacturing equipment is used in the early stages of the manufacturing process. Wafer processing equipment includes photolithography tools, etching machines, and chemical vapor deposition machines, measurement machines, and process/ quality control apparatus.

Rise in the demand for semiconductor for various industries such as electronics, automotive, and data processing sectors is expected to augment the demand for these products, which fuels the growth of the market. In addition, rise in the sales of electric vehicles and the increasing semiconductor demand for automotive applications generates opportunities for the vendors of these products. The global electric vehicle sales increased by 109% in 2021 as compared to 2020.

The increasing demand for discrete devices, power semiconductors, and high power module for various end users is expected to drive the semiconductor manufacturing equipment market growth. In addition, rising trend of incorporating semiconductors on a single chip owing to increase in preference of consumers for compact size products. In such a situation, this equipment is largely used for assembling semiconductor components into a single chip. Furthermore, artificial intelligence (AI) is also boosting the growth of the market due to adoption of semiconductor in data center applications. These data centers are assembled with IC chips, which helps in reducing operational costs and increasing efficiency.

COVID-19 IMPACT

Market Growth Impacted Due to Partial or Complete Closure of Manufacturing Activities

The partial or complete lockdown implemented globally due to COVID-19 outbreak resulted in the downfall of many manufacturing processes. In addition, halted manufacturing related activities, manufacturing facilities, and disruptions in supply chain negatively impacted the growth of the market for the first and second quarters of 2020 (January 2020 - June 2020). For instance, the net sales of Tokyo Electron Limited dropped by -11.8% from 2019-2020.

The key players witnessed a substantial increase in revenue generated after the third quarter of 2020, owing to re-opening of manufacturing facilities at full pace. For instance, the net sales of Applied Materials Inc increased by around 2.8% in 2020 as compared to 2019.  Furthermore, from the 2nd quarter of 2020, the demand for these products kept on growing and is set to register a significant growth. The demand for front end as well as back end manufacturing equipment is anticipated to surge with the rise in the demand for semiconductor chips and components. Furthermore, innovative technologies adopted by clients and work on research & development are projected to impel the long-term growth of the market.

LATEST TRENDS

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Technological Advancements to Positively Boost the Market Growth

Key market players are focusing on introducing technological advancements with nano-imprinting, state-of-the art lithography technology, and the fastest manufacturing speed. For instance, in September 2021, Riber based in the U.S. launched a new MBE 6000 machine for semiconductor manufacturing applications for Asia. This machine was adopted for manufacturing of electronics and optoelectronic devices. These types of electronic components are largely used in telecommunication channels such as 4G, 5G, and fiber optic networks. The machines have features such as high production capacity and high accuracy. These types of machines provide high profit margins for manufacturers and suppliers. In the past few years, these machines have implemented new technological advancements such as Artificial Intelligence (AI), and Industry 4.0 for improving production capacity, high accuracy, reducing wastage, and also improving the profit margins for major players, which is projected to boost the market growth.

DRIVING FACTORS

Increasing Product Demand for Wireless Technology and Manufacturing Sector to Fuel Market Growth

The industry has recorded an increasing adoption of semiconductor components, IC chips, and logic circuits for autonomous, connected, consumer electronics, home appliances, and electric vehicles. In addition, increasing automation in the automotive sector surged the demand for lithographic systems and semiconductor chips, which is anticipated to propel the demand for machine manufacturing semiconductor components.

Furthermore, there has been a growing trend of adoption of SIC wafer (semi-insulating carbide wafer) in the telecommunication industry to build 5G network connectivity across various economies such as India, the U.S., and others. This factor is anticipated to boost the demand for manufacturing machines. In addition, rise in demand for smart cities and smart homes, which increases the demand for IC chips, and components, fuels the market growth. 

RESTRAINING FACTORS

High Capital Investment to Hamper Product Demand

Semiconductor manufacturing equipment is extremely costly and requires huge capital investment. The fluctuating prices of machines are projected to hamper the market growth. This is due to the fact that major players are facing certain difficulties while procuring the raw materials. Moreover, owing to COVID-19 pandemic, the trade between China-U.S., coupled with disruption in supply chain, is impacting the import and export of components which directly affect the manufacturing cost of these machines. For instance, these system costs range from USD 15 to USD 20 billion. Such factors are anticipated to restrain market growth.

Complexity of Design Pattern to Restrain Market Growth

The semiconductor manufacturing process requires a clean system and neat room for the fabrication process. The dust particles can hamper the overall manufacturing plant, which provides substantial loss to the company. The delay in supply chains, owing to defect occurred while manufacturing semiconductors causes loss for the vendors, or manufacturers. The complexity of design patterns owing to presence of multiple design patterns on a chip at very small space demands high accuracy for transferring precision data on chip. In addition, rising demand for SIC wafers in various sizes decreases the wavelength of lithography equipment. All such factors are anticipated to restrain the growth of the market. 

SEGMENTATION

By Equipment Type Analysis

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Rising Demand for Logic Circuits and Discrete Devices to Portray Strong Growth for Front-end Equipment Segment

By equipment type, the market is divided into back-end equipment and front-end equipment.

The front-end equipment segment will exhibit the highest CAGR of 10.0% during the forecast period (2022-2029). The front-end equipment segment is a major contributor in the market due to the presence of key players which are proposing these types of systems. In addition, rising demand for IC chips and logic circuits for various end-users increases the adoption of these systems, which, in turn, fuels the market growth of this segment.

The back-end equipment segment is expected to witness a substantial growth rate with the introduction of inventive packaging solutions for the automotive and consumer electronics industries. All such factors drive the market growth.  

By Dimension Analysis

3D Segment to Depict Higher CAGR Due to Need for High Efficiency

On the basis of dimension, the market is categorized into 2D, 2.5D, and 3D.

The 3D segment is anticipated to witness strong growth and dominates the market. This is on account of various features such as increasing development in High Bandwidth Memory (HBM) products, higher performance, and higher efficiency. These types of devices are largely used in digital cameras, cell phones, and personal digital assistants.

The 2D and 2.5D segments are set to observe substantial growth. This is due to features such as higher bandwidth, high chip functionalities, wider bandwidth, and reducing the time and cost of wires. Such factors fuel the market growth.  

By Application Analysis

Semiconductor Fabrication Plant/Foundry Segment to Observe Significant Growth Owing to Rising Demand for Circuits from the Manufacturing Sector

By application, the market is classified into semiconductor electronics manufacturing, semiconductor fabrication plant/foundry, and test home.

The semiconductor fabrication plant/foundry segment is expected to dominate the market due to the growing need for semiconductors from end-users such as medical devices, electronics, and automotive.    

The semiconductor electronics manufacturing segment is projected to grow exponentially, owing to rise in awareness about the testing of semiconductors and its components. Moreover, stringent government policies regarding the testing of devices are expected to impel the growth of this segment.

REGIONAL INSIGHTS

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The scope of the market includes five regions, North America, Asia Pacific, Europe, the Middle East & Africa, and South America.

Asia Pacific is in the best position to lead the market, owing to strong supply chains of semiconductor devices such as circuits, discrete devices, and logic circuits across countries such as Taiwan, Japan, and China. The growth in automotive and consumer electronics sectors is anticipated to boost the demand for SIC wafer and IC chips for these industrial sectors. In addition, there are vital numbers of suppliers in India and South Korea, which are positively expected to contribute to the growth of the market in Asia Pacific.

China to Witness Fastest Growth Attributed to Adoption of Technological Advancements in these Products

China is one of the manufacturing hubs for semiconductors related equipment. Major players, such as Sizone Technology, JW Insights, and others, have the highest geographical presence in China. In addition, well established infrastructure sector and rising growth of the automotive industry are expected to fuel the demand for these machines. Also, these machines are used to manufacture IC chips, logic circuits, SIC wafer, and others. This is poised to increase the demand for semiconductor manufacturing equipment, boosting the market growth.

North America is anticipated to grow exponentially during the forecast period, owing to the presence of manufacturers such as Applied Materials Inc, Kla Corporation, LAM Research Laboratories, and others. Subsequently, major providers based in the region are aiming on establishing up plants in places where substantial subsidies are available.

Europe is anticipated to record substantial growth over the forthcoming years. This is on account of good trade relations with other countries and government initiatives toward investing in new semiconductor manufacturing plants. For instance, according to Euractiv Germany Reports, the German government planned to invest USD 3.39 billion in the semiconductor manufacturing plant.

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The Middle East & Africa and South America are projected to have moderate growth due to the existence of some companies functioning in these regions. Also, rising disposable income of the population is expected to result in increasing spending on home appliances and consumer appliances across Dubai, Brazil, Argentina, and others. This is expected to increase the demand for machine manufacturing IC chips and components.

KEY INDUSTRY PLAYERS

Prominent Players Emphasize on Strategies to Improve Overall Market Presence

Semiconductor manufacturing equipment players have adopted strategies such as product launches, acquisitions, and business expansion to improve the product portfolio of semiconductor manufacturing machines and improve the geographical location of manufacturers globally. Moreover, key semiconductor manufacturing equipment companies are more focused on adopting advancements in such products. In addition, there has been a rise in government initiatives for investing in semiconductor fabrication units. For instance, in October 2021, Japanese government planned to provide a subsidy of USD 7.12 billion to companies such as Sony and TSMC for a semiconductor manufacturing equipment facility in Western Japan. The new facility will be able to manufacture SIC wafer in sizes of 22nm and 28nm (nanometer). Such instances boost the growth of the market.

LIST OF KEY COMPANIES PROFILED:

• Applied Materials Inc (U.S.)


• Tokyo Electron Limited (Japan)


• Lam Research Corporation (U.S.)


• ASML (Netherlands)


• Dainippon Screen Group (Japan)


• KLA Corporation (Netherlands)


• Ferrotec Holdings Corporation (Japan)


• Hitachi High-Technologies Corporation (Japan)


• ASM International (U.S.)


• Canon Machinery Inc (Japan)

KEY INDUSTRY DEVELOPMENTS:

• May 2021 – Applied Materials Inc launched an optical semiconductor inspection machine using advanced technologies such as Artificial Intelligence (AI) and Big Data. These machines are used in semiconductor manufacturing plants to automatically inspect chips and detect killer defects in IC chips. These chips are used for electronics devices.


• December 2021 – Hitachi High-Tech Corporation, a subsidiary of Hitachi, introduced the new GS1000 electron beam area inspection system. The machine provides precise and quick inspection through the use of a common platform with high-speed inspection systems with Scanning Electron Microscope (SEM). Further, the machine improves the accuracy of semiconductor wafer products.  


• November 2021 - Advantest Corporation acquired R&D Altanova Inc, which deals in discrete devices, silicon wafers, substrates, for interface boards for electronics sectors. The acquisition was done for improving the portfolio of these products across multiple sectors.


• July 2021 -  Tokyo Seimitsu Co Ltd launched the new “SURFCOM NEX” contour measuring instrument. These machines have features such as high efficiency, high precision, high accuracy, and high reliability. It performs 1.6 times as per conventional measurement machines.


• December 2020 -  KLA Corporation launched a series of wafer geometry machines such as SP7Xp wafer and PWG5TM. These machines are designed for minimizing the challenges in the manufacturing of semiconductor chips and discrete devices. These machines are used in manufacturing of cutting edge logic circuits. These chips are integrated into the automotive and electronics industries.   

REPORT COVERAGE

An Infographic Representation of Semiconductor Manufacturing Equipment Market

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The report focuses on leading regions across the globe to offer a better understanding of various applications. Moreover, the report offers insights into the industry dynamics and analyzes technologies utilized at a rapid pace across the world. It also comprises some of the key factors and restraints to help the readers gain in-depth knowledge about the market.

Report Scope & Segmentation