Global semiconductor manufacturing equipment market is likely to exhibit a promising growth curve as far as the short-term outlook is considered. The report will uncover the insights into how the market growth will unfold in the next few years.
Exploding Sales of Smartphones, and Wearable Devices Create Tailwinds for Semiconductor Manufacturing Equipment Market
The spike in demand for consumer electronics is one of the major reasons behind the growth of the global semiconductor manufacturing equipment market. Demand for complex and miniature semiconductor parts and components is rising in the consumer electronics sector. In addition, market expansion is complemented by technical breakthroughs and the adoption of cutting-edge technologies like blockchain, and Artificial Intelligence. The market for equipment used in semiconductor fabrication will also grow due to advances in ultra-violet lithography technology. Furthermore, the increasing adoption of smartphones, and wearable technology supports the market expansion for semiconductor manufacturing equipment. In 2021, there were 127.5 million smartwatches sold worldwide, with 42.4 million shipped in the last quarter.
Additionally, it is anticipated that the semiconductor sector will expand during the projected period at a rapid rate. This is a result of the rise in consumer and mobile electronics sales. Demand for semiconductor wafers will continue to be driven by the advent of new technologies such as IoT, connected devices, ultra-high-definition (UHD) TVs, automation in autos, and hybrid laptops over the forecast period. The increasing use of hybrid and electric vehicles is another trend influencing the market for equipment used in semiconductor fabrication. EV sales reached a new high of 6.9 million globally in 2021, up 107% from the previous year. In electric cars, many semiconductors are employed as parts, and components. As a result, this aspect promotes the growth of the global semiconductor manufacturing equipment market.
One of the main factors projected to drive the market is the rollout of 5G. According to the most recent Omdia data, 430 million new global 5G connections were added between Q2 2021 and Q2 2022, a growth of 1121.1 percent from 383 million to 813 million. As a result, innovations like augmented reality, mission-critical services, fixed wireless access, and IoT would be made possible by the deployment of 5G infrastructure. Additionally, the necessity for larger wafer sizes for ultra-large-scale integration technologies has aided in the growth of semiconductor manufacturing equipment market due to the industry's progressive transitions, such as the downsizing of nodes and wafer sizes.
Semiconductor Manufacturing Equipment Market: COVID-19 Impact
In 2020 and 2021, the COVID-19 pandemic negatively affected the market, decreasing revenues for market participants. As a result, the growth trajectory of semiconductor manufacturing equipment market slowed down in 2020 and the first half of 2021. Throughout the first half of 2020, the COVID-19 pandemic impacted semiconductor supply networks and manufacturing procedures worldwide, particularly in China. The main cause was a labor crunch, which caused several semiconductor businesses to shut down. Companies that make finished goods and rely on semiconductors were put in a bind as a result. With the increase in production volume and the spike in demand for consumer electronics devices and hybrid electric vehicles in the third or fourth quarter of 2022, the demand for front-end equipment, back-end equipment, and fab facility equipment is anticipated to soar.
Rising Use of IoT, Connected Cars, and Data Business Demand to Lead to Rapid Semiconductor Manufacturing Equipment Market Expansion
The range of semiconductor applications, including those in cars and other mobile devices, is expanding. The market for machines used in semiconductor fabrication is growing as a result. For instance, semiconductors are used in connected, electrified, and driverless vehicles. Thus, rising semiconductor consumption in autonomous and hybrid vehicles is anticipated to fuel market revenue for semiconductor manufacturing equipment. Another important factor in maintaining the market is deep learning chips, a subset of all artificial intelligence systems. Such a growing tendency in the semiconductor sector casts a direct impact on the growth of semiconductor manufacturing equipment market.
Rising Need For Semiconductor Manufacturing Facilities to Support Semiconductor Manufacturing Equipment Market Growth
Front-end semiconductor production facilities, or fabs, have recently operated above 80% capacity utilization, with some fabs running as high as 90-100% due to the rising demand for semiconductors. However, because it takes so long to manufacture semiconductors, their capacity utilization must be increased. With the worldwide chip scarcity, the semiconductor industry is rapidly expanding fab capacity utilization to satisfy the rising demand. Semiconductor manufacturers launched 19 new high-volume fabs in 2021, and another 10 high-volume fabs are expected to be built in 2022, according to SEMI's World Fab Forecast, published in June 2021. Fabs have increased to fulfill the rising demand for chips across various markets, including communications, computers, healthcare, online services, and automotive, which indicates a massive opportunity existing for the semiconductor manufacturing equipment market participants.
Pattern Complexity, and Functional Flaws to Hamper Semiconductor Manufacturing Process, in Turn Limiting Semiconductor Manufacturing Equipment Market Growth
To fabricate semiconductors, a clean space and clean tools are necessary. Small dust particles can significantly harm the company's bottom line by interfering with the manufacturing system as a whole. The existence of several patterns on a chip at a very small scale, which necessitates great accuracy for sending precise data to the chip, causes an increase in pattern complexity. The ongoing push to make semiconductor devices smaller and denser has increased the complexity of wafers, which in turn reduces the lithography wavelength. With the increased complexity of photomasks and wafers brought on by the reduction in node size, new semiconductor manufacturing machinery would be required. This is likely to push the prospects of semiconductor manufacturing equipment market.
Front-end Equipment Remains Preferred in Semiconductor Manufacturing Equipment Market Based on Lower Cost
The front-end equipment segment is expected to dominate the semiconductor manufacturing equipment market due to key players providing these systems. Several companies are selling front-end equipment in the market. The Semiconductor Industry Association also claims that the cost of designing and producing semiconductors accounts for a significant portion of the value of a chip. The front-end equipment segment is anticipated to gain a sizable share from this market trend for semiconductor manufacturing systems, contributing to the industry's expansion. The lithography sub-segment had the greatest market share in 2021 and is anticipated to maintain its dominance over the forecast period due to intensive R&D in this area. The increased usage of photolithography equipment, in turn, drives the expansion of the lithography segment. The demand for semiconductor chips is rising across a variety of end-use industries.
With Rapid Technological Development, 3D Segment to Dominate Semiconductor Manufacturing Equipment Market
The semiconductor manufacturing equipment market will likely grow at the fastest rate in the near future, driven by the 3D category. The development of technological trends, wherein 3D integrated circuits (IC) serve superior performance, is responsible for this expansion. Additionally, it is anticipated that the design of 3D ICs will provide a viable solution to the problems associated with traditional geometrical scaling. The market for manufacturing equipment for semiconductors makes extensive use of 3D integrated circuits. As a result, this aspect is anticipated to positively impact market growth since 3D integrated circuit design and development will change the industry.
The Major Semiconductor Manufacturing Hub, Asia Pacific Captures a Dominating Share in Semiconductor Manufacturing Equipment Market
Asia Pacific now retains the largest share and will rule the global semiconductor manufacturing equipment market space in the upcoming years due to significant semiconductor manufacturing equipment vendors with headquarters in China, and Taiwan. Sales of semiconductor equipment outside of a few big nations are extremely constrained or nonexistent due to the enormous concentration of this technology in a small number of countries. China is now a major contributor to the development of advanced semiconductor technologies. On the other hand, the Chinese government continues prioritizing the semiconductor sector as a source of technological leadership and economic growth. By 2030, it is projected to contribute about 40% of the new worldwide capacity. According to the global trade organization SEMI, Taiwan is anticipated to surpass all other countries this year in terms of front-end chip production equipment spending because of the strong demand for chips used in automobiles and high-performance computing devices. Spending on fab equipment in Taiwan is anticipated to increase by 52% annually to US$34 Bn.
During the forecast period, Europe is anticipated to grow at the fastest rate. The UK dominates the equipment market for semiconductor production in Europe. The semiconductor manufacturing equipment market in Europe is expanding due to rising investments in producing semiconductor equipment. Additionally, favorable trade relations with other countries are creating opportunities for the European market for semiconductor manufacturing equipment to grow. Moreover, the businesses and institutions that make up the European nanoelectronics ecosystem proposed to raise money through a joint program with the European Union to boost global revenues by roughly US$224 Bn annually, which would further boost the market share of semiconductor manufacturing equipment in this area.
Global Semiconductor Manufacturing Equipment Market: Competitive Landscape
In June 2022, RIBER, a global market leader in molecular beam epitaxy (MBE) equipment for the semiconductor sector, announced a multi-4' GSMBE 49 production system order. The next generation of datacom devices necessitates highly precise control of the epitaxial growth process, which Riber's machines deliver through their proven performance and the intricacy of their control software. The ordered machine is scheduled to arrive in 2023. In June 2022, Veeco stated that Taiwan's National Applied Research Laboratories had chosen Veeco's propel R&D Metal Organic Chemical Vapor Deposition System. The single wafer platform is well-suited for high-volume manufacturing, 300 mm capabilities, and R&D applications.
A few of the players in the global semiconductor manufacturing equipment market include Applied Materials Inc., Tokyo Electron Limited, Lam Research Corporation, ASML, KLA Corporation, Dainippon Screen Group, Hitachi High Technologies Corporation, ASM International, Ferrotec Holdings Corporation, and Canon Machinery Inc.
Regional Classification of Global Semiconductor Manufacturing Equipment Market Can be Given as Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability.
Key Elements Included In The Study: Global Semiconductor Manufacturing Equipment Market
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