Semiconductor equipment market is estimated to be valued at US$ 96.17 Bn in 2024, exhibiting a CAGR of 9.3% over the forecast period 2024-2031. Furthermore, increasing IoT and connected devices adoption boosts demand for semiconductors. This is expected to drive the growth of semiconductor equipment market.
Market Dynamics:
Global semiconductor equipment market growth is driven by increasing demand for electronics and rising adoption of advanced technologies. Rising demand for electric vehicles and consumer electronics such as smartphones, laptops, tablets boosts need for integrated circuits (IC). This prompts semiconductor manufacturers to expand their production facilities by investing heavily in semiconductor equipment. According to World Semiconductor Trade Statistics (WSTS) in 2021, the capital expenditure by semiconductor companies had increased by over 25% in 2021 as compared to 2020.
Another key growth driver is rapid digitization across various industries and growing deployment of 5G networks globally. 5G networks require advanced semiconductor ICs and chips to handle high-speed data processing. This boosts demand for semiconductor fabrication equipment. Major equipment manufacturers are increasingly focusing on developing new generation lithography systems, deposition systems, and etching systems to meet the precise and complex manufacturing requirements of advanced nodes of 5G, IoT, and AI.
Global Semiconductor Equipment Market- Drivers
- Increasing Demand for Electronic Devices: One of the key drivers for growth of semiconductor equipment market is rising demand for electronic devices globally. Semiconductors are a core component of all modern electronic devices such as smartphones, laptops, tablets, wearables and more. With increasing digitization and ownership of electronic devices, the demand for semiconductors has grown exponentially in recent years. According to a report in, over 6 billion smartphones are expected to ship in 2025. This growing demand for a wide variety of consumer electronic products boosts need for more advanced semiconductors and semiconductor manufacturing equipment.
- Advancements in Technology: Another major market driver is the constant advancements taking place in semiconductor technology. With each new generation of chips, manufacturers are able to pack more transistors into smaller areas which allows devices to become more powerful yet compact. This drives the need for semiconductor equipment with more precision, higher throughput and new fabrication capabilities. For example, the transition from 14nm/10nm node sizes to 7nm and 5nm requires completely new lithography systems. Equipment manufacturers are investing heavily in R&D to develop tools needed for manufacturing next-gen chips. This technology evolution ensures a need for frequent capital equipment upgrades and investments.
Global Semiconductor Equipment Market- Restraints
- High Cost of Equipment: One of the key challenges faced by the semiconductor equipment market is the exorbitantly high cost associated with manufacturing tools. The R&D and production costs of state-of-the-art lithography systems, deposition systems, etching tools and others have risen exponentially over the years. A single cutting-edge immersion lithography system can cost upwards of US$ 120 million, representing a major capital expenditure. This high initial investment poses a restraint, especially for smaller semiconductor foundries and wafer fabs with limited budgets.
- Cyclical Nature of Industry: The semiconductor industry goes through cycles, with times of both high and low demand. When the economy is not doing well, sales of devices can decrease a lot. This leads to underutilization of existing fab capacity and postponing of equipment upgrades by chip manufacturers. The bursting of the dot-com bubble in the early 2000s and the global financial crisis of 2008 are examples that negatively impacted capital spending on new tools. This cyclicality introduces uncertainty among equipment manufacturers and represents a notable market restraint.
Global Semiconductor Equipment Market- Opportunities
- Demand from Emerging Markets: While established markets in North America, Europe and Asia continue expanding, semiconductor equipment companies are exploring opportunities in emerging economies as well. Countries like India, Brazil, Indonesia, Mexico, Turkey and others present a vast untapped potential due to growing middle class, increasing electronics consumption and government initiatives to boost local chip manufacturing. Foreign players see opportunities to forge strategic partnerships, set up local R&D/manufacturing bases and sell tools targeting these developing semiconductor hubs.
- Transition to Newer Nodes Below 7nm: The most prominent opportunity lies in the ongoing transition to advanced nodes of 7nm and below. State-of-the-art factories are increasing production using these technologies, leading to a huge demand for Extreme Ultraviolet (EUV) lithography tools, deposition systems, etch equipment, and other tools. As more foundries upgrade to 5nm and strive for 3nm nodes in the future, it will require new tool configurations at greater scales of precision, throughput and wafer sizes. Equipment vendors are well-positioned to benefit from this technology migration by supplying the latest manufacturing solutions.
Link: https://www.coherentmarketinsights.com/market-insight/semiconductor-equipment-market-2532
Key Developments:
- In September 2022, Onto Innovation is a company that provides innovative solutions and services for various industries. announced that it had delivered its Dragonfly G3 system with the new EB40 module to one of the top three semiconductor manufacturers. This move allows the company to broaden its range of products and offerings in the market.
- In December 2021, Hitachi High-Tech Corporation is a company that provides advanced technology solutions and services. launched GS1000 Electron Beam Area Inspection System. This system offers fast and accurate e-beam inspection using advanced CD-SEM technology, enabling quick and precise measurements on a wide range of samples.
Key Players:
Applied Materials Inc., ASML, Nordson Corporation, Cohu, Inc., Lam Research Corporation, Tokyo Electron Limited, KLA-Tencor Corporation, Teradyne Inc., ASM International N.V., Nikon Corporation, Canon Inc., BE Semiconductor Industries N.V. (Besi), Veeco Instruments Inc., Rudolph Technologies, Inc., Onto Innovation Inc., Ultratech, Inc., Nova Measuring Instruments Ltd., Mycronic AB, SPTS Technologies Ltd.
