The semiconductor equipment market comprises equipment utilized for semiconductor wafer production such as lithography, etching, deposition equipment. Semiconductors are the building blocks for all modern electronics as they are used in integrated circuits for a wide range of applications including computers, smartphones, networking devices, and automation equipment. The rising demand for consumer electronics combined with trends such as artificial intelligence, 5G rollout, and quantum computing is driving demand for more advanced semiconductors. Semiconductor equipment manufacturers are increasingly focusing on developing equipment integrated with AI and machine learning capabilities to improve production efficiency.
The Global Semiconductor Equipment Market is estimated to be valued at US$ 95.97 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the semiconductor equipment market are Northrop Grumman Corporation, BAE Systems, Lockheed Martin Corporation, Clearpath Robotics Inc., John Bean Technologies Corporation, ECA Group, Israel Aerospace Industries Ltd., Endeavor (Now a part of FLIR system), Harris Corporation, and General Dynamics. These players are focusing on developing AI integrated semiconductor manufacturing equipment to gain a competitive advantage.
The Semiconductor Equipment Market Demand for semiconductor chips is growing rapidly due to the proliferation of IoT devices, artificial intelligence, autonomous vehicles, and 5G technology. With increasing digitization across industries, the need for high-performance computing is driving semiconductor consumption.
Major equipment manufacturers are investing heavily in R&D to develop new lithography, deposition, and etching technologies such as EUV lithography, nanowire transistors, and vertical gate-all-around FET to manufacture smaller and more powerful chips. Advancements in semiconductor manufacturing equipment allow fabrication of integrated circuits with higher transistor densities and lower power consumption.
Market Trends
Miniaturization is a key trend in the semiconductor equipment market as device manufacturers aim to pack more components into a given area. This is ushering development of nanolithography, 3D wafer production systems, and vertical transistors by market leaders.
Sustainability has also become a priority for equipment manufacturers. They are designing tools with fewer consumables, improved energy-efficiency, recycled components, and capability for handling a larger variety of materials. For example, using EUV lithography eliminates the need for multiple resist coating steps.
Market Opportunities
The emergence of new computing paradigms such as quantum and neuromorphic computing is expected to open new growth avenues for semiconductor equipment manufacturers. Developing high-throughput manufacturing solutions for alternative computing models will be an area of focus.
Emerging markets like India, Brazil, and Africa will increasingly contribute to the global semiconductor demand over the coming years, especially for applications like solar panels, automotive chips, industrial IoT sensors. This creates opportunities for equipment suppliers to establish manufacturing facilities and sales channels in these regions.
Impact of COVID-19 on Semiconductor Equipment Market Growth
The COVID-19 pandemic adversely impacted the semiconductor equipment market growth in the initial months of 2020. Government imposed lockdowns and travel restrictions disrupted the global supply chains. It led to delays in new equipment installations and non-critical upgrades at fabrication plants. The sudden drop in demand from end-use industries like consumer electronics, automotive also postponed new capital equipment orders.
In the pre-COVID period, the market was growing at a steady pace owing to the rising demand for chips from applications like 5G infrastructure, AI, data centers, automotive electrification. However, with the onset of the pandemic, foundries started operating at reduced utilization rates which discouraged new capital spending.
But semiconductor equipment manufacturers are expecting a strong rebound in 2021 backed by rising demand from cloud computing, remote work culture. The deferred orders and manufacturing expansion plans of foundries are also likely to drive equipment procurement. Governments globally are supporting domestic chip manufacturing which will fuel further capacity additions. Electronics OEMs are restocking inventory levels post lockdowns to fulfill pent-up consumer demand. Such factors are anticipated to accelerate the market recovery and help it surpass pre-pandemic growth levels in the long-run. International partnerships can aid technology transfers and mitigate COVID-19 induced supply chain disruptions.
The Asia Pacific region accounts for the largest share of the global semiconductor equipment market in terms of value. The presence of leading foundries and memory chip makers in countries like Taiwan, South Korea, and China has propelled the regional market. Their huge capital expenditure on advanced nodes and increased outsourcing is driving equipment procurement.
North America is projected to emerge as the fastest growing regional market between 2024-2031. This is attributed to policy support for onshoring semiconductor manufacturing through initiatives like SEMI and CHIPS acts. Establishment of new fabrication facilities by Intel and investment plans of Samsung, TSMC signify huge growth opportunities in the regional market over the forecast period.
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