The Physical Vapor Deposition Market is estimated to be valued at USD 24.04 Bn in 2024 and projected to grow at a CAGR of 6.2% over the forecast period 2024-2031. The market is witnessing high growth owing to increasing demand for PVD coatings from the microelectronics industry. Furthermore, the growing application of PVD coatings in the automotive Industry for enhancing the appearance and protection of automobile exteriors and components is fueling the market growth.
Market Dynamics:
The Physical Vapor Deposition market growth is driven by the expanding microelectronics industry and increasing use of PVD coatings in automotive applications. The aggressive research and development in semiconductors has increased the demand for PVD coatings for depositing thin film on electronic substrates. PVD coatings provide conductivity, insulation, and diffusion barriers in semiconductor manufacturing processes. Furthermore, the burgeoning automotive industry worldwide is boosting the consumption of PVD coatings for automotive aesthetics and protection purpose. PVD coatings enhance the gloss, scratch resistance and corrosion protection of automobile exteriors, engine components, and other automobile parts which has increased their use in the automotive manufacturing industry substantially over the past few years. These factors are expected to propel
Growing Demand from the Microelectronics Industry is Driving Growth of the Physical Vapor Deposition Market
The microelectronics industry has seen significant growth in recent years due to increasing demand for smartphones, laptops, wearable devices and other consumer electronics. Physical vapor deposition (PVD) technology plays a key role in the microelectronics manufacturing process as it is used to deposit thin film coatings on electronic components and circuits. The miniaturization of electronics has led to an increase in the number of layers in semiconductor devices, boosting the need for PVD coatings. Deposition of materials like aluminum and copper is crucial for applications such as interconnects and contacts. Advancing node sizes in semiconductor manufacturing below 10nm have further increased the importance of PVD. The growing complexity of device design and new applications in areas such as 5G, artificial intelligence and augmented reality are expected to support continued demand growth for PVD coatings from the microelectronics industry over the forecast period.
Rising Demand for Cutting Tools is Another Major Driver for the Physical Vapor Deposition Market
PVD coatings are widely used in cutting tools for metalworking applications to enhance features such as wear resistance and heat resistance. The automotive, aerospace and medical device industries extensively use coated cutting tools for machinining critical components. Growth in these end-use industries has increased the demand for coated cutting tools. In the automotive sector, the rise in vehicle production along with the use of new materials is propelling the cutting tools market. Similarly, the aerospace industry is witnessing higher aircraft deliveries and broader adoption of additive manufacturing which requires advanced cutting tools. Increased surgical procedures along with new product launches are fueling the demand within medical devices as well. All these factors are expected to drive the need for PVD coated cutting tools and consequently support market growth over the forecast period.
Volatility in Raw Material Prices Pose a Challenge for Market Players
PVD processes extensively use precious metals such as gold, silver, platinum and palladium as target materials for depositing coatings. Fluctuations in the prices of these raw materials can significantly impact the operating costs of PVD manufacturers. For instance, palladium prices increased by over 50% in 2016–2017 due to supply constraints. Similarly, volatility in titanium and aluminum prices affects the costs. As PVD services have low profit margins, volatility in raw material prices poses pricing challenges. It reduces the predictability of costs. This acts as a key restraint for PVD equipment and services providers in terms of business planning and margins. Efforts must be made to effectively manage and hedge risks associated with raw material price fluctuations.
Environmental Regulations Can Limit Market Growth
Physical vapor deposition involves the use of chemicals and generates gaseous byproducts which are hazardous in some cases. Strict environmental regulations regarding the emission and disposal of such chemicals vary across regions. For instance, the Restriction of Hazardous Substances (RoHS) directive in Europe restricts the use of heavy metals in electronics. Similarly, the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation affects the use of chemicals in several applications. Complying with such regulations involves additional costs for PVD players in terms of installing abatement systems or shifting to alternative processes. Tightening of existing norms or introduction of new regulations in various geographies can restrain the demand and revenue growth of the PVD market to some extent.
Growing Adoption of PVD in the Optical Coatings Industry Presents Opportunities
PVD has widespread use in optical coatings for manufacturing eyeglass lenses, optical filters, telescopic lenses, and laser optics among others. Functions such as antireflection, reflection enhancement and color rendering are imparted through PVD coated thin films. The demand for coated optical components is driven by the growing eyewear industry as well as increasing use of laser applications. Advancing technologies such as augmented reality smart glasses and 3D displays will create more opportunities. Similarly, broader adoption of solar panels and increasing investments in solar power farms will boost the need for PVD coatings for antireflection and enhancement of light absorption. Overall, the rising demand from optical and solar applications indicates significant opportunities for PVD players over the coming years.
Increasing Demand for PVD Coatings in Consumer Durables is another Key Opportunity
Consumer durables such as home appliances, kitchenware and bathroom fittings extensively use PVD coated parts for attributes like scratch resistance, tarnish resistance, and aesthetic appeal. Properties like high corrosion resistance make PVD ideal for appliances. Growth in consumer spending power, urbanization and online shopping are supporting the sales of consumer durables in developing countries. Rising middle-class population is willing to spend.
Link - https://www.coherentmarketinsights.com/market-insight/physical-vapor-deposition-market-490
Key Developments
- Oerlikon Balzers and ITP Aero signed a ten-year agreement in June 2023 to utilize Oerlikon's innovative wear-resistant coating, BALORA TECH PRO, on components of the Pratt & Whitney Canada PW800 turbofan engine. These components are essential for the propulsion systems of the newly launched Dassault Falcon 6X business jets and Gulfstream G500/G600 aircraft. This collaboration underscores the significance of advanced coatings in improving the performance and durability of aero engine components
- In April 2022, Veeco Instruments, a physical vapor deposition industry, unveiled its Environmental, Social, and Governance (ESG) goals for 2022 and beyond, showcasing the company’s on-going commitment to corporate social responsibility. The goals, based on feedback received from the company’s stakeholders and results of their 2021 materiality assessment, relate to climate change, product responsibility, diversity and inclusion and responsible corporate governance.
- In June 2022, Oerlikon, a physical vapor deposition industry, improved productivity and increased lifespan and tailored solutions, and most demanding applications within the chemicals and plastics industries and in PUR applications, these are the convincing arguments with which Oerlikon Barmag is showcasing its precision metering pumps. The focus is on the new pump for shear-sensitive conveying media and the new eccentric screw pump.
- In February 2022, Veeco Instruments, a physical vapor deposition industry, announced that a mask blank supplier to the semiconductor industry has ordered Veeco’s IBD-LDD Ion Beam Deposition (IBD) System. The IBD system will be used to meet growing demand for extreme ultraviolet (EUV) mask blanks used to create semiconductor devices related to advanced logic and memory applications. This new customer is acquiring Veeco’s IBD technology for low defect EUV mask blanks intended for high volume production.
Key Players
Oerlikon Balzers (Oerlikon Group), IHI Corporation, Silfex Inc., Lam Research Corp, Singulus Technologies AG, Applied Materials, Inc., ULVAC Inc., Veeco Instruments Inc., Buhler AG, Semicore Equipment, Inc., Platit AG., Intevac, Inc., Denton Vacuum, Impact Coatings AB, Advanced Coating Service, KOLZER SRL, Inorcoat, Lafer S.p.A., Kobe Steel Ltd., and HEF Groupe
