Physical Vapor Deposition Market

Market Overview

The global physical vapor deposition market size was valued at USD 19,448 million in 2021 and is expected to generate USD 30,525 million by 2030. The market is projected to grow at a CAGR of 5% during the forecast period (2021–2030). 

Physical vapor deposition uses a wide range of equipment to provide hard coatings upon the material, including vacuum, heating, condensation, and coating equipment.

Physical vapor deposition is a coating method that takes place in a vacuum. It includes activities including evaporation, transit, reaction, and deposition at the atomic level. The procedure is safe for the environment and is used to improve the surface qualities of both inorganic and organic substrates. Physical vapor deposition processes such as sputtering and evaporation are employed on microelectronics components to impart hardness and wear resistance before the components are installed in devices.

The process used to create thin films and coatings is known as physical vapor deposition (PVD), sometimes known as physical vapor transport (PVT), and it encompasses several vacuum deposition techniques. In this process, materials moved from the condensed phase of thin films to the vapor phase before returning to the condensed phase.

The global physical vapor deposition market growth is segmented based on product, technology, end-use, and region. 

Market Dynamics

Market Drivers

• Sustained Growth in Semiconductor Manufacturing

Presently, mainstream electronics consists of semiconductor packages and surface mount technology processes. Together, they make up cell phones, tablets, PCs, laptops, and other devices. Microelectronic devices are produced through a sequence of steps that include deposition of thin-film materials, prototyping thin films, selective etching of thin films, and modification of these materials.

On repetition of the above-mentioned steps, in a specific sequence, with varying parameters and patterns, hundreds of chips can be produced upon a single wafer, each containing hundreds of millions of functioning devices. Physical vapor deposition processes such as sputtering and evaporation provide hard; wear resistance coating over the chips before they are placed on the end-user devices. One such process is thin film deposition.

Ongoing development and innovations in connectivity, communications, advanced software, automotive industry, and data centers are projected to create a substantial demand for microelectronics over the forecast period, which, in turn, is expected to boost the demand for PVD. Increasing consumption of electronics components used in the navigation of automobiles, infotainment, and safety is anticipated to contribute to the growth of the overall microelectronics industry in the coming years. This is further expected to augment the demand for physical vapor deposition.

• The Rise in Medical Applications

The medical device industry manufactures products used in applications such as nursing homes, hospitals, clinics, and home healthcare. PVD coatings are applied to tools & equipment to enhance the effectiveness, efficiency, and lifespan of the medical devices. With the improvement of these devices, the hospitalization period and treatment fees get affordable. Thus, the PVD market is likely to witness huge demand from the medical sector due to its wide usage of medical equipment. The PVD in the medical equipment market depends on healthcare spending in a particular region.

The key factors influencing the demand for medical equipment include availability, awareness, affordability, and adaptability. Ascending demand for better healthcare facilities in developing economies, coupled with a rise in the number of hospitals, is likely to boost the growth of the medical equipment industry. Increasing healthcare expenditure and the presence of well-equipped healthcare centers & hospitals in the North American region are factors expected to positively impact the regional medical equipment market. These factors are projected to boost the consumption of surgical equipment, which, in turn, is likely to drive the PVD market over the forecast period.

• Penetration of micro-electronics into the market

The growing adoption of microelectronics across numerous sectors primarily drives the market expansion of physical vapor deposition. Small electronic devices with a size of a few micrometers are produced using microelectronics, and they are used in the automobile, defense, and healthcare sectors. One of the primary industries using physical vapor deposition is microelectronics (PVD). Consequently, the market for physical vapor deposition is growing due to the expansion of the microelectronics industry.

Market Restraints

• High Capital Costs

Despite delivering high performance, the growth of PVD coating technology has been limited, owing to the high capital cost. The cost includes raw material price, equipment cost, and skilled labor employed to run the complex machinery. A PVD technique requires an appropriate cooking system for processes operating at high temperatures and vacuum, such as evaporate materials having a high melting point. Thus, the system requires skilled operators, leading to high capital costs.

Along with high capital cost, PVD coatings have been limited by fluctuating prices of titanium owing to the growing demand for titanium and titanium alloys in aerospace and aircraft applications. The trend is further expected to rise during the forecast period. Also, most of the technology in the market is patented. Owing to these factors, the high cost of production is expected to pose a restraint for the market growth over the forecast period.

Market Opportunities

• Growing Focus on Eco-friendly Coating Process

The physical vapor deposition process is safe for the environment. Compared to other coating methods, such as electroplating or painting, the coating process produces no harmful waste. There is extremely little chance of harmful material being released into the environment. Furthermore, PVD-coated products survive longer, reducing the risk of solid waste formation and indirectly aiding in preserving the environment. Environmentally friendly materials like chromium nitride (CrN) and titanium nitride (TiN)are used.

This type of material can also be used on top of corrosion-resistant electroplating to improve the ornamental and wear-resistant appearance. As a result, this deposition provides outstanding performance without posing any environmental risks. Consumers and manufacturers are moving their preferences toward eco-friendly materials and methods as the necessity of setting sustainable goals grows.

• expanding adoption of digital solutions

Digitization has significantly shaped economies by creating new economic opportunities and raising productivity. In industries with higher levels of digitization, productivity rose. Industries like media, banking, travel, healthcare, retail, and manufacturing have leveraged digitization to boost connectivity and create a robust value chain.

Regional Analysis

The physical vapor deposition market share is segmented into four regions: North America, Europe, Asia-Pacific, Central and South America, and Middle East & Africa.

Fastest Growth in Asia-Pacific

The North American Physical Vapor Deposition market is expected to generate a value of USD  6,013 million by 2030, at a CAGR of 4%.

In North America, the U.S. accounted for the maximum revenue share of 80% in 2019, accounting for the growing demand for medical equipment in the country. Countries such as the U.S. and Canada are characterized by a low-risk environment and robust financial sector. These factors have provided many opportunities for investors in recent years, thereby augmenting medical spending in the region. This, in turn, is projected to positively impact the demand for physical vapor deposition (PVD) in the medical equipment industry.

The European Commission approved USD 2 billion in 2018 for research & development (R&D) in the microelectronics industry to produce more reliable, durable, and energy-efficient components. Major countries contributing to this project include Germany, the UK, France, and Italy. The R&D is expected to boost the European microelectronics industry, which is growing slowly in specialization, mainly in countries such as the Netherlands, Germany, and the UK. The ongoing R&D will increase the specialization manufacturing of microelectronics in the region, which is expected to drive the PVD market growth.

The Asia-Pacific physical vapor deposition market trends is expecting lucrative growth in the coming future. Asia-Pacific dominated the global market and is expected to generate a value of USD 15,226 million by 2030 at the highest CAGR of 5% during the forecast period.

With rising electricity demand in Asian countries, particularly in China and India, renewable energy, particularly solar energy, is gaining traction as a coal-free alternative in the Asian energy mix. Important factors for the growth of solar power generation in the region are reducing the carbon footprint, supportive government regulations & incentives to minimize risk, facilitating healthy sales subsidies for new and large-scale solar installations, and competition based on electricity per unit pricing. Large-scale solar projects use state-of-the-art technologies resulting in solar power generation at a competitive price. The growth in solar power generation is expected to drive the physical vapor deposition (PVD) market in the region.

The Middle East & Africa region has a strong demand for medical equipment is significantly high owing to the increasing number of chronic diseases and expansion of the private healthcare industry.

Segmental Analysis

The physical vapor deposition market share is classified into technology, category, and applications.

Based on Technology

The physical vapor deposition market is segmented into thermal evaporation, sputtering, and io plating. The thermal evaporation segment is dominant over other product types of physical vapor deposition and is expected to generate USD 13,774 million by 2030. It is expected to grow at a CAGR of 4% during the forecast period.

Thermal evaporation is one of the simplest physical vapor deposition technologies, both in system configuration and mechanism. It is a vacuum technology used for applying a coating of pure materials onto the surface of various objects. This method can be used for depositing a range of materials, including both metals and non-metals, as well as molecules, including nitrides and oxides. Thermal evaporation can be used to deposit various materials, including aluminum, nickel, silver, magnesium, and chromium onto substrates.

By Category

The market is classified into PVD equipment, PVD materials, and PVD services. The physical vapor deposition (PVD) equipment segment is anticipated to generate USD 17,713 million by 2030 at a CAGR of 4%.

Quality equipment is used to achieve physical vapour deposition coating, which helps simplify the process. Cutting tools, forming and punching, molding, and die-casting are all examples of equipment that can be used according to the application. Aurora Scientific Corp. manufactures and supplies Aurora Star series coating equipment for tool coatings applications to provide consumer application-specific coatings based upon the requirement. IHI Hauzer B.V. offers the Flexicoat series for coating automotive components, decorative coatings, large dies & broaches, and high estimates tool coatings. There are numerous manufacturers in the market providing application-specific equipment to provide hard, wear-resistance coatings.

By Application

The physical vapor deposition market is classified into microelectronics, data storage, solar products, cutting tools, medical equipment, and others. The microelectronics segment was the highest contributor to the market and is estimated to reach USD 11,358 million by 2030, at a CAGR of 4% during the forecast period.

PVD materials

Titanium, aluminum, zirconium, stainless steel, copper, and gold are among the PVD materials (for specific applications). These materials can be used with different substrates, such as nylon, plastics, glass, ceramics, and metals. The material offers wear resistance, conductivity, abrasion and corrosion resistance, and barrier protection. Additionally, the materials' eco-friendliness promotes the expansion of this market segment worldwide.

PVD services

The area of the global market with the quickest growth is PVD services. Because they are durable and kind to the environment, coating services are employed by various businesses. To discover new coating applications and enhance the performance of their products, businesses constantly do research. For example, the Australian start-up Plasmakote sells ABACO thin-film coatings. It has unique antibacterial qualities that prevent bacterial growth on the surface where it has been applied. Therefore, the availability of such cutting-edge items is anticipated to benefit the service segment's growth during the forecast period.

PVD is one of the fundamental methods in microelectronics, allowing the coated material to have the unique property of peptide supramolecular nanomaterials and integrate with a wide range of applications. Physical vapor deposition coating is used for semiconductor packaging in satellite, space, and military markets. In wireless and photonics, PVD coating is used in packaging materials, including microelectromechanical systems, RF power amplifiers, light-emitting diodes, and laser recorders.

Solar products

Throughout the projection period, the solar products segment is anticipated to experience robust CAGR growth. The demand for solar energy is greatly fueled by the growing government measures to combat the decreasing fuel resources and regulate carbon emissions. As a result, solar panel demand is rising quickly on a global scale. The PVD coatings improve corrosion resistance and help the solar panels last longer. During the forecast period, the demand for PVD coating is anticipated to increase due to the increased need for solar panels.

data storage

Some key drivers propelling the expansion of the data storage segment include the expanding e-commerce industry, the rising use of smartphones in urban and rural areas, and the growth of innovative technologies. The rising demand for data analytics across all manufacturing and service sectors fuels the demand for data storage devices.

cutting tools

They are cutting tools with PVD coatings that last longer, which reduces cycle time and results in significant energy savings. Such coated instruments offer durability and prevent wear-outs and replacements. Less cutting fluid can be used when using these instruments at higher temperatures. This thereby lowers the overall cost of production.

Others

PVD uses on ornamental films, optical frames, home furnishings, consumer products, and other metal applications are included in the others segment. The applications above are in high demand because of the PVD characteristics. Numerous businesses are conducting ongoing research to find new uses for machinery and coatings.

Impact of covid-19

As per the WHO, the number of reported COVID-19 cases jumped from 87,137 on March 01, 2020, to 102,083,344 as of February 01, 2021, with approximately 2,209,195 deaths globally. The rapid rise in the number of confirmed COVID-19 cases globally resulted in the governments of various countries resorting to stringent containment measures to slow down the spread of the pandemic. However, complete lockdowns across countries also resulted in a short-term decline in the GDPs of their respective economies.

The COVID-19 pandemic had e a dual effect on the electronics industry, wherein the manufacturing of electronics components was halted due to lockdowns imposed in various countries, coupled with slower logistical processes and supply interruptions. Furthermore, the unavailability of labor globally has also contributed negatively to the manufacturing of electronic components.

The discontinuation in the delivery of electronics products by e-commerce companies during the lockdown, as they were considered non-essentials, negatively impacted the electronics industry. However, increased demand for laptops, computers, and mobile phones due to work-from-home situations positively affected the electronics industry.

The Chinese economy was hit tremendously as it was the epicenter of the COVID-19 pandemic, disrupting the supply chain for major electronic brands. As China is the major exporter and manufacturer of raw materials required to produce electronic products, this has led to the halting of the ongoing production of electronics in the U.S. and Europe, thereby creating a demand-supply gap.

Recent Developments

• In December 2022, Oerlikon invested cash into its Surface Solutions division by building a new, cutting-edge assembly and production facility in Switzerland.
• In December 2022, Oerlikon signed an agreement to buy Riri and established itself as a market leader in the luxury sector.
• In January 2023, An approval in principle (AiP) from ClassNK was obtained by NYK Line, Nihon Shipyard Co., Ltd. (NSY), and IHI Corporation (IHI) for an ammonia floating storage and regasification barge (A-FSRB).