Global Semiconductor Equipment Market (by Segment, Supply Chain, Dimension, & Region): Insights & Forecast with Potential Impact of COVID-19 (2022-2026)
The electronic characteristics of a semiconductor material (mainly silicon, germanium, gallium arsenide, and organic semiconductors) govern the function of a semiconductor device. Since the introduction of integrated circuits in the 1950s, transistor density has increased, aided by technical advances in the manufacturing process. Semiconductor equipment is the foundation of process advancement, since each new generation of process node require better and more complex manufacturing equipment.
Semiconductor equipment are used in the fabrication of semiconductors and integrated circuits, which are employed in the manufacturing process of a variety of industries such as medical, banking, telecommunications, automobiles, and so on, which has directly boosted the demand for semiconductor equipment. The global semiconductor equipment market is estimated to reach US$126.40 billion in 2023, growing at a CAGR of 9.90%, during the forecast period.
- By Segment: The report has segmented the global semiconductor equipment market into three different segments: Wafer equipment, Assembly and packaging equipment and Test equipment. The wafer equipment segment accounted for majority of market share. In the future, the demand for silicon wafers and equipment footprints would aid in the analysis of the semiconductor wafer fab equipment market. Furthermore, advancements in wafer technologies that have resulted in denser packaging of devices such as MEMS (micro-electro-mechanical system) and transistors are expected to lay the groundwork for new opportunities that companies can capitalize on.
- By Supply Chain: The report splits the global semiconductor equipment market into three segments in terms of supply chain: IDM, OSAT, and Foundry. IDM segment held the largest share in semiconductor equipment market, while the same segment is the fastest growing during the forecast period, as IDM Semiconductor equipment market is expected to enhance their Integrated Circuit (IC) production capacity, the companies are partnering with semiconductor manufacturing equipment providers.
- By Dimensions: The report provides the bifurcation of market into three segments on the basis of dimensions: 2D, 2.5D and 3D. 2.5D dimension packaging held the maximum share in semiconductor equipment market. The fastest growing segment is 3D dimensions due to heavy investments on the R&D by many key players, including Amkor Technology, ASE group, Silicon ware Precision Industries Co., Ltd., and others, leading to the improvement in advanced packaging techniques.
According to this report, the global semiconductor equipment market can be divided into four major regions, on the basis of geographical areas: Asia Pacific, North America, Europe and Rest of the World. The countries covered in Asia Pacific region include the China, Japan, Taiwan and South Korea, while North America includes the US, Mexico, and Canada. Moreover, Germany, UK, France, Italy and Rest of Europe are included in the European region.
The Asia Pacific semiconductor equipment market enjoyed the largest market share, primarily owing to the dominance of China, Taiwan, South Korea, which are the Asia-Pacific most attractive market for semiconductor equipment. China is the world’s largest semiconductor equipment market. China’s semiconductor equipment market is expected to achieve solid growth, underpinned by high foundry capex expectations driven by rising demand; technology process development, where more equipment investment is needed; memory process development; photovoltaic demand driven by environmental production; and rising demand in LEDs, MEMS, power devices, and advanced packaging. Furthermore, Europe and North America are considered the emerging market for semiconductor equipment.
Top Impacting Factors:
- Growth in Consumer Electronics Industry
- Increased use of Semiconductors in Medical Devices
- Mounting usage of semiconductor equipment in Gaming Industry
- Rising Government Support
- Functional Defects and Complexities
- High Cost Associated
- Increasing demand for Artificial Intelligence
- Escalation of Internet of Things (IOT)
- Surging Demand for Electronic vehicles
- Emerging Industrial Robotics
- Driver: Growth in Consumer Electronics Industry
The consumption of electronic devices such as smartphones, tablets and laptops, had increased over the years and one of the primary factors driving the growth of consumer electronics is the growing preference for smart electronic devices. Semiconductor chips, which are used as components in power devices, compactness optical sensors, and light emitters, are the basic requirement for the manufacture of these smart electronic devices. A semiconductor material is a device that allows electric current to pass through it and is used in devices such as CPUs. It is made up of a large number of transistors. These factors lead to increased demand for semiconductors, which translates into a higher demand for semiconductor equipment.
- Challenge: Functional Defects and Complexities
The semiconductor equipment's are used in the manufacturing of semiconductors and integrated circuits. Advanced semiconductor fabrication can involve thousands of process steps, which makes the procedure very complex. Each piece of equipment at a process step has the potential to fail, resulting in a default and possibly reducing production yield. The fabrication of advanced semiconductors can involve thousands of parts sourced from a variety of suppliers. Some common fabrication equipment issues include corrosion, pressure regulator malfunction, or improperly sized or fitted seals. Any of these issues could have potentially large impacts on fabrication equipment performance and product quality. So, the functional defects and complexities can happen any time and can lead to delay in the manufacturing of products and delivery, which would directly disturb the supply chain.
- Trend: Escalation of Internet of Things (IOT)
IoT depends on sensors and MEMS technology, they can monitor actions of connected objects and machines. IoT applications cannot work without sensors and integrated circuits, so all IoT devices would require semiconductors. This would result in increased demand for sensors, connectivity, memory, microcontrollers, and integrated circuits, which could put pressure on the existing semiconductor supply chain. Semiconductor manufacturers that choose to meet IoT demands now would be well positioned to take advantage of this developing market. Hence, the increasing penetration of IOT devices would boost the growth of the semiconductor equipment market.
The COVID-19 Analysis:
During the pandemic, semiconductor equipment manufacturers witnessed a fall for a very short period of time as lockdown was imposed suddenly. While in the second half of 2020 and after that, the semiconductor equipment market sharply increased exceeding the fall due to acceleration of global economies' digital transformation as pandemic has boosted the digitalization. Increased use of electronic devices due to online classes and work from home, indirectly increased the demand for semiconductor equipment as these devices need semiconductors and integrated circuits to be installed in them, which are manufactured from semiconductor equipment.
Analysis of Key Players:
The market for semiconductor equipment is concentrated with top five players accounted for more than 60% share. Chinese players accounted for less than 5% of the global market share, although they are expanding quickly. Further, key players of the semiconductor equipment market are:
- Hitachi High Tech Corporation,
- ASML Holding Semiconductor Company,
- Applied Materials Inc.,
- Lam Research Corporation,
- Tokyo Electron Limited
- KLA Corporation,
- Teradyne Inc.,
- Nikon Corporation
- Canon Inc.,
- Screen Holding Co. Ltd,
- Advantest Corporation, and
- ASM International N.V,
China domestic players are well-positioned for the semiconductor localization trend. Most of China’s semi equipment market share has been taken up by global leaders, who have absolute competitive edge in technology and customer base. Chinese players have been making good progress in R&D and customer verification, and have market share gain potentials in mid-to-low-end products.