Global wet chemicals for electronics and semiconductor applications market is estimated to be valued at USD 4.Bn in 2024, exhibiting a CAGR of 7.1% over the forecast period 2024-2031. The market growth is primarily driven by growing demand for semiconductors from various end-use industries like automotive, consumer electronics, and others. Furthermore, rising investments in building semiconductor manufacturing facilities can also drive the market growth in near future.
Rising demand for semiconductors
Semiconductors are key components used in various electronic devices like smartphones, computers, vehicles, and others. Continuous innovation and new product launches in consumer electronics and automotive sectors has boosted demand for semiconductors globally. This boosts demand for wet chemicals as these are used in semiconductor manufacturing processes.
Growing electronics industry
Global electronics industry has witnessed steady growth over the past few years. Countries like China, India, Japan, South Korea are major electronics production hubs. Continuous government support toward electronics manufacturing & ease of regulations can boost electronics production, and this can boost demand for wet chemicals from the electronics industry during the forecast period.
Growing demand for electronic devices drives the global wet chemicals market growth
Rising demand for consumer electronic devices such as smartphones, tablets, laptops, and other smart devices is expected to drive the growth of global wet chemicals market. As the number of electronic devices increases worldwide each year, the demand for semiconductors and chips that power these devices also rises significantly. Wet chemicals play a vital role during the manufacturing of semiconductors and integrated circuits (ICs). Various wet chemicals are used in cleaning, etching, and other processing steps in the semiconductor manufacturing process. Therefore, rising demand for electronic products directly translates to increased need for wet chemicals.
Advancements in semiconductor technology requires improved wet chemicals
Continuous advancements in semiconductor technology towards smaller node sizes and more complex chip designs can drive the growth of wet chemicals market. Cutting-edge nodes below 10nm require high-performance wet chemicals with greater purity and functionality. As transistors get smaller and more densely packed on chips, these need advanced wet chemical formulations for sensitive cleaning and etch applications during manufacturing. Leading chipmakers are constantly demanding customizable wet chemical solutions customized to their exact process specifications. This drives suppliers to innovate and develop specialized wet chemicals formulated for advanced technology nodes.
Stringent environmental regulations hampers the market growth
Growing environmental regulations around the safe usage and disposal of chemical waste can pose challenge for wet chemical manufacturers. Strict norms such as REACH in Europe discourage the use of toxic chemicals. Environmental protection agencies monitor industries for compliance, which increases operational costs. Manufacturers must invest in waste treatment and recycling facilities to meet regulations. Additional R&D is required to replace hazardous chemicals with eco-friendly alternatives. However, developing green substitutes without compromising process results is difficult and expensive. Cost pressure from regulatory adherence can hamper the market growth.
Supply chain disruptions restrict business operations
The wet chemicals industry is also impacted by supply chain disruptions due to factors such as natural calamities, geopolitical issues, and trade policies. Recent events highlighting this risk include factory shutdowns or delays in China affecting chemical exports globally. Disruptions cause fluctuations in raw material prices and delay chemical shipments. These strain business operations by hampering just-in-time deliveries to semiconductor fabricators. Ensuring fail-proof sourcing and alternate supply networks requires significant investments, and this adds to the operational expenses of wet chemical producers.
Growth of foundry manufacturing and emerging chip technologies
Rising popularity of foundry manufacturing services in the semiconductor ecosystem offers new opportunities for wet chemical suppliers. Foundries do not have in-house wet processing capabilities and outsource chemical requirements. This fosters long-term partnerships between foundries and chemical providers. Emerging technologies such as 5G networks, artificial intelligence, autonomous vehicles also stimulate the design of novel semiconductor chips and integrated circuits. Their manufacturing introduces demand for specialized wet process chemicals tailored for materials and advanced node designs. Wet chemical vendors can capitalize on this to develop innovative and customized solutions.
Increasing adoption of eco-friendly chemicals
With sustainability becoming a priority, chipmakers and OEMs prefer 'green' manufacturing processes. This opens the door for wet chemical manufacturers to commercialize environment-friendly alternatives. Natural and biodegradable formulations can replace conventional toxic variants. Companies investing in green chemistry R&D gains a competitive edge. Growing eco-consciousness among electronic brands acts as a tailwind, encouraging wider acceptance of sustainable wet chemicals. Vendors adapting their portfolios to meet the sustainability criteria of customers will have more opportunities in the future.
Key Developments
- In 2023, Entegris sold its electronic chemicals business to Fujifilm. Another term commonly used to describe such a business transaction is "divestiture." This process involves a company selling off a portion of its assets, subsidiaries, or divisions to another entity. Divestiture is often undertaken to streamline operations, focus on core business areas, raise capital, or respond to changing market conditions.
- In June 2023, Clariant Oil Services launched PHASETREAT WET, a more sustainable demulsification process for the oil and gas industry. PHASETREAT WET uses nanoemulsion technology to reduce carbon emissions and demulsifier dosages by up to 75%.
- In 2022, Entegris, Inc. announced its acquisition of CMC Materials, Inc.
Key Players
Avantor Inc., BASF SE, Eastman Chemical Company, FUJIFILM Corporation, Honeywell International LLC, KANTO CHEMICAL CO. INC., KMG Chemicals (Cabot Microelectronics), kredence Pvt Ltd, Solvay, T.N.C. INDUSTRIAL CO. LTD, Technic Inc., Linde, Zhejiang Kaisn Fluorochemical Co. Ltd
