Thin Wafer Market

Market Overview

The global thin wafer market size was valued at USD 12.7 billion in 2023 and is projected to reach USD 21.4 billion by 2032, registering a CAGR of 5.9% during the forecast period (2024-2032).

Thin wafers are semiconductor substrates that are thinner than traditional wafers. These wafers are necessary in semiconductor device manufacturing, allowing for advancements in electronics and technology.

The global market is predicted to increase significantly due to the industry's growing demand for ultra-thin semiconductor wafers. Many of the challenges associated with traditional chip production procedures have been overcome as technology advances. The expansion of thin wafer users and the increasing adoption rate of portable devices will likely boost lean wafer market growth. Increasing awareness, combined with the expansion of the semiconductor sector, is likely to drive market growth over the forecast period.

Highlights

• 300mm is the most common wafer size in the market.
• Temporary Bonding and Debonding hold the significant market share by process.
• Memory influenced the market growth by application.
• Wafer Dicing generates the most revenue in the market by technology.

Market Dynamics

Global Market Drivers

Demand for Miniaturized Technologies

The growing demand for smaller and more compact electronic devices, such as smartphones, wearables, and IoT devices, is a significant driver of thin wafer production. More delicate wafers allow for the production of smaller and lighter semiconductor components, contributing to the trend of miniaturization in electronics. The smartphone industry is an excellent example of the demand for miniaturized electronics. According to IDC India, smartphone shipments are expected to increase by 5-8% in 2024, reaching 148 million units. Consumers consistently seek sleek, lightweight smartphones with advanced features. Thinner wafers allow for the production of smaller and more efficient semiconductor components, contributing to smartphones' miniaturization.

Furthermore, the rise of wearables, such as smartwatches and fitness trackers, is another area where thin wafers play an essential role in achieving compact form factors while maintaining performance. Further, the wearable market is experiencing significant growth. IDC's Worldwide Quarterly Wearable Device Tracker states that the global wearables market is expected to ship 396 million units by 2021. Thin wafers contribute to producing the compact semiconductor components found in these wearables.

Similarly, the Internet of Things (IoT) includes a wide range of connected devices, from smart home appliances to industrial sensors. Many IoT applications necessitate small, energy-efficient, and inexpensive semiconductor solutions. Thin wafers enable the production of compact chips suitable for various IoT devices. As a result, the thin wafers market trend helps to develop the compact and efficient semiconductor components required for the widespread deployment of IoT devices.

Global Thin Wafer Market Restraints

High Manufacturing Cost

Thinning wafers require additional steps and precision, making manufacturing more complex and expensive. High manufacturing costs can be a barrier, especially for smaller semiconductor manufacturers or industries where cost-effectiveness is crucial. Thinning wafers require intricate steps to achieve the desired thickness while maintaining structural integrity. Advanced technologies like chemical mechanical polishing (CMP) and grinding processes thin the wafers to the required specifications. Implementing and maintaining these complex thinning processes adds significantly to the overall manufacturing cost. For example, producing a standard four-inch 500-um wafer can range between a few dollars and USD 32.00. A six-inch wafer can cost less than USD 10.00 or more than USD 100.00. 

According to a Semiconductor Industry Association (SIA) report, the global semiconductor industry will invest over USD 50 billion in R&D in 2020. This substantial investment demonstrates the industry's commitment to advancing technologies related to thin wafer manufacturing. Furthermore, the International Technology Roadmap for Semiconductors (ITRS) estimates that achieving high yield rates in semiconductor manufacturing may necessitate additional investments of up to 30% of total manufacturing costs. This includes spending on quality control measures and advanced technology to increase yields.

Global Market Opportunity

Expansion of 5G Technology

The deployment of 5G networks necessitates advanced radio frequency (RF) components, and thin wafers are essential in manufacturing RF front-end modules. These modules are integral to 5G devices, enabling high-speed data transmission and low-latency communication. The growing demand for 5G smartphones will drive the demand for RF filters. According to the GSMA, the 5G adoption rate as a percentage of mobile connections in Canada will increase to 49% by 2025 from 8% in 2021. 

Furthermore, because front-end modules are critical to many wireless applications, such as base stations and 5G smartphones, China's massive capital investment project to develop the domestic semiconductor industry has entered its second funding phase. The project will last five years and cost YUAN 204.15 billion (USD 28.9 billion). The evolution of 5G technology drives the creation of smaller, more powerful devices. Thin wafers allow for the miniaturization of semiconductor components like power amplifiers, filters, and switches, which are required for 5G devices such as smartphones, routers, and IoT devices. The demand for thin wafers is consistent with the industry's goal of developing compact and efficient 5G-enabled devices.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global thin wafer market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global thin wafer market shareholder and is estimated to grow at a CAGR of 6.2% over the forecast period. Asia-Pacific's dominant position in China and Japan will lead to increased adoption of high-end consumer electronics, such as wearables and smart home appliances. The region has become a global hub for significant investment and business opportunities. Furthermore, the increasing number of investments and the ongoing expansion of businesses in Asian countries create new opportunities for the region's market growth. Samsung Electronics announced in March 2023 that it will invest USD 230 billion over the next 20 years to build five new memory and foundry fabs in South Korea. The investment is part of the Korean government's ambitious plan to construct a mega semiconductor hub in Yongin, on the outskirts of Seoul, dubbed the world's most extensive chip-making base. This expansion in the NAND flash memory and manufacturing industries is critical to increasing demand for thin wafers in Asia-Pacific.

Furthermore, the global semiconductor market is expected to grow significantly in Asia-Pacific due to improved economic conditions and rising consumer electronics demand. These factors contribute to the positive growth of APAC's demand for thin wafers. Furthermore, Japan plays a vital role in the semiconductor industry because it is home to several major manufacturers and the electronics industry. The government is expected to launch an investigation to assess the viability of bringing major chip makers into the country. Meanwhile, Japan-based organizations are considered significant suppliers of the most critical semiconductor manufacturing and packaging materials. Japanese exchange rates and high production costs increase the cost of materials for Japanese suppliers, creating opportunities for other suppliers in low-end applications.

North America is anticipated to exhibit a CAGR of 6.3% over the forecast period. North America accounts for a sizable share of the market. Country-wise, the United States has the largest share in the region. One of the primary reasons the United States commands a high valuation in the global thin wafers market is its extensive consumer electronics industry. Other important sectors, such as healthcare and automotive, contribute significantly to the local demand for thin wafers. The presence of leading light wafer manufacturers in the country and robust R&D initiatives have accelerated market growth in the region. Other factors driving the United States' dominance in the thin wafers industry include the demand for high-performance electronics and the need for miniaturization.

Europe holds a sizable share of the market. The United Kingdom's emphasis on innovation and R&D has expanded the country's thin wafers industry. Several key players in the thin wafer industry have established operations in the United Kingdom, contributing to the industry's significant global valuation. One of these trends is the increasing popularity of high-performance computing (HPC) and consumer electronics.

Segmental Analysis

The global thin wafer market is segmented based on wafer size, process, application, technology, and region.

The market is further segmented by wafer size into 125mm, 200mm, and 300mm.

300mm is the most common wafer size in the market.

The 300mm or 12-inch wafer is the current industry standard for semiconductor manufacturing. It provides significantly higher production efficiency and cost-effectiveness than smaller wafer sizes. The larger surface area of a 300mm wafer enables the production of more semiconductor devices per wafer, lowering manufacturing costs per chip. The semiconductor industry has widely adopted the 300mm wafer size, allowing for increased production capacity and supporting the development of advanced microprocessors, memory devices, and other complex integrated circuits. The transition to 300mm wafers has been critical in increasing overall semiconductor manufacturing efficiency and promoting the development of cutting-edge technologies.

The 200mm wafer size, 8-inch wafers, has been the industry standard in semiconductor manufacturing for decades. It strikes a balance between cost efficiency and production capacity. Semiconductor manufacturers frequently use 200mm wafers to manufacture a variety of integrated circuits, including microcontrollers and analog devices. While larger wafer sizes allow for greater production scalability, the 200mm size remains useful for specific applications, particularly in fabs with equipment optimized for this size. It balances cost-effectiveness and the ability to produce sufficient chips per wafer.

Based on the process, the market is fragmented into temporary bonding, debonding, and the carriers/Taiko process.

Temporary Bonding and Debonding hold the major market share.

Temporary bonding and debonding are processes in thin wafer manufacturing that involve temporarily bonding a thin wafer to a carrier substrate for various processing steps such as thinning, grinding, or backside processing. The thin wafer is separated from the carrier substrate and prepared for further processing or integration into semiconductor devices following these steps. Temporary bonding helps to protect the thinned wafer during the next manufacturing steps. With the growing demand for thin wafers in advanced semiconductor applications, there is a greater need for temporary bonding and debonding processes. This segment addresses the needs of industries looking for compact, high-performance electronic devices.

Carrier Less/Taiko Process

The Carrier Less or Taiko process uses a single thick wafer, known as a "donor" or "handle" wafer, then thinned to the desired thickness. Unlike temporary bonding and debonding, there is no separate carrier substrate. Instead, the thinned wafer is processed directly, with the remaining thick portion reused for subsequent thinning processes. The Carrier Less/Taiko process meets specific manufacturing requirements and preferences, offering an alternative to temporary bonding methods. It may be preferred in applications where the simplicity of the process and potential for reuse align with manufacturing objectives.

The market can be bifurcated by application into MEMS, CMOS image sensors, memory, RF devices, LEDs, interposers, and logic.

Memory influenced the market growth.

Smartphone manufacturers dominated the memory segment, accounting for most of the thin wafer market share. Thin wafers are used to manufacture various memory devices, including dynamic random-access memory (DRAM) and NAND flash memory. The thinning process helps to reduce the overall size of memory chips. Memory devices are essential components in computers, smartphones, tablets, and other electronic devices. Advances in thin wafer technology improve memory chip performance and capacity.

Depending on the application, the LED segment is expected to influence the market during the forecast period. This is due to the increased use of thin wafers in LEDs, which helps manufacturers increase their profitability. A wide range of electronic devices and components are commonly used in LEDs to create thin wafers.

The market is sub-segmented based on technology into Wafer Grinding, Wafer Polishing, and Wafer Dicing.

Wafer Dicing generates the most revenue in the market.

Wafer dicing is the process of separating semiconductor wafers into individual chips or dies. This is typically done after the wafer has been thinned and processed to produce functional semiconductor devices. Dicing is cutting precisely along predefined lines to separate individual chips. Wafer dicing is an important step in manufacturing discrete semiconductor devices, integrated circuits, and other electronic components. Creating the final form of semiconductor chips that can be packaged and integrated into electronic systems is necessary.

Wafer grinding is a technique for reducing the thickness of a semiconductor wafer by mechanically removing material from its surface. A grinding wheel containing abrasive particles grinds the wafer, gradually reducing its thickness to meet the desired specifications. Wafer grinding is a common method for thinning wafers to meet specific thickness requirements, particularly in manufacturing ultra-thin semiconductor devices. This process is critical for applications requiring precise control over thickness.

Recent Developments

• September 2023- Shin-Etsu Chemical expanded its QST substrate business for use in GaN power devices.
• January 2024- Infineon Technologies and SK Siltron CSS confirmed a Long-Term Silicon Carbide (SiC) Supply Agreement.
• August 2023- EV Group (EVG), a leading supplier of wafer bonding and lithography equipment for the MEMS, nanotechnology, and semiconductor markets, has announced new developments in 3D/heterogeneous integration and augmented reality (AR) waveguide manufacturing enabled by its advanced wafer-to-wafer (W2W) and die-to-wafer (D2W) hybrid bonding, metrology, and nanoimprint lithography (NIL) solutions.