Semiconductor Chemical Vapor Deposition (CVD) Equipment Market

Market Overview

The global semiconductor chemical vapor deposition equipment market size was 13 billion in 2022. It is estimated to reach a predicted value of USD 27 billion by 2031, registering a CAGR of 8.6% during the forecast period (2023-2031).

Chemical vapor deposition, sometimes known as CVD, is a vacuum deposition process used to create solid materials that have superior quality and functionality. They are widely employed in the semiconductor sector to create thin sheets. These materials are typically tougher than other materials and have high purity levels. They are widely employed in various applications, including coatings, electronics, and catalysis.

One of the main drivers of the chemical vapor deposition (CVD) equipment growth is the rise in demand for semiconductor equipment. Other important drivers include the growth of the semiconductor industry, the population's demand for electronics, the rise in investment in semiconductor equipment, the development of CVD equipment, and the rise in environmental regulations regarding Cr6. Additionally, during the forecast mentioned above, the market for chemical vapor deposition (CVD) equipment will experience growth in the demand for solar cells, the number of end-user industries in developing countries, and research and development activities.

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Market Dynamics

Market Drivers

An Increase in the Demand for Semiconductor and Microelectronic Devices

Semiconductors provide tasks including high computing, operations control, input, and output management, data processing, storage, sensing, wireless communication, enhanced efficiency, and power management at a reasonable cost when integrated into intricate microelectronic circuits. The semiconductor industry has been able to manufacture cheaper and exponentially more advanced goods because of rapid invention. In addition, quick changes in consumer behavior over the past year have shifted the world's attention to technology. In reaction to constraints brought on by the pandemic, demand for equipment and infrastructure to support the new work- and learn-from-home environments grew quickly.

Governments and industry stakeholders are closely monitoring microelectronics sector advancements because they have the potential to both disrupt and grow the market for the Internet of Things. Research and development (R&D) for microelectronics may expand due to the growing use of virtual reality and augmented reality technology due to the impending bandwidth constraint.

Rise in Adoption Of The Technology For Several End-users

A rapidly evolving technique for creating ceramic films and coatings for a variety of applications is chemical vapor deposition (CVD) from metallorganic precursors (MOCVD). Carbon nanotubes (CNTs), graphene, and silicon nanowires (Si-NWs) are among the nanotechnology materials that are in higher demand due to the development and production of battery components for electric vehicles.

Web-integrated wireless healthcare devices, wearables, and 3D printing of organs and medical devices that ride on semiconductors will be critical factors that ensure new and creative ways of providing healthcare in the future. A modern, networked, and driverless vehicle can easily have more than 3,000 chips with the newest technological features. Semiconductors support the technological infrastructure required for maintaining communication networks outside of the conventional brick-and-mortar setting in the case of the current pandemic-enforced "remote everything" — be it business, learning, entertainment, or catching up with friends and family.

Many smart cities globally are committed to improving city services and critical civic infrastructure for their citizens. To do that, they need to connect almost every aspect of civic infrastructure with a wide range of devices, which in turn will be connected with individuals. Semiconductors will power this interconnected infrastructure. Hence, all such applications drive segment growth. 

Market Restraint

High Investment in the Technology

The CVD setup for making semiconductors can be difficult and expensive. As foundries and Outsources Semiconductor Assembly and Test (OSAT) businesses continue to grow output to meet the expanding chip demand, they are anticipating additional pressure on capital expenditures. A new foundry's construction can cost between $15 billion and $20 billion, requiring substantial manufacturing expertise and a strong infrastructure. The back-end assembly, packaging, and testing facilities can run between USD 5 billion to USD 7 bn. Additionally, firms invest a significant portion of their revenue in capital expenditures and R&D.

Firms must continually invest a significant share of revenue in R&D and new plants and equipment to remain competitive in the semiconductor industry. The pace of technological change in the industry requires that companies develop more complex designs and process technologies and introduce production machinery capable of manufacturing components with smaller feature sizes. As per the Semiconductor Industry Association (SIA), the ability to design and produce state-of-the-art semiconductor components can only be maintained through a continual commitment to keeping pace with industrywide investment rates of roughly 30% of sales. All such factors impede market growth. 

Market Opportunities

Multiple Research Activities

The market is witnessed various research activities, driving various factors for a market vendor to invest in CVD. For instance, in December 2021, Advances, The direct generation of highly oriented monolayer graphene on sapphire wafer layers was documented by Zhaolong Chen and an international research team in nanochemistry, intelligent materials, and physics from China, the United Kingdom, and Singapore. The research team achieved a development strategy by creating an electromagnetic induction CVD at a high temperature. This method resulted in a graphene layer with significantly increased carrier mobility and lower sheet resistance.

Further, in July 2020, Agnitron developed a technique for producing the semiconductor material gallium oxide by Metal-Organic Chemical Vapor Deposition using the dual-use Agilis machine (MOCVD). In addition, the method allows for the substitution of different materials as necessary. All such research initiatives provide immense potential for market growth. 

Regional Analysis

By Region, the global semiconductor chemical vapor deposition equipment market is segmented into Asia Pacific, North America, Europe, and the Rest Of The World. 

Asia-Pacific dominated the market and is estimated to register a CAGR of 9.1% during the forecast period. The increased demand for electric vehicles is anticipated to fuel the fast growth of the APAC automotive semiconductor market. Self-driving cars have already drawn many buyers in important automotive manufacturing nations, so automakers must continue to innovate, produce, and improve them. India's economy has become one of the fastest-growing in the world because of its population. The country's automotive semiconductor market is predicted to grow quickly in the upcoming years. In the coming years, a robust semiconductor R&D infrastructure that supports the automotive industry will create new opportunities for the Indian semiconductor market.

North America is the second largest region. It is estimated to reach a predicted value of USD 3 billion by 2031, registering a CAGR of 6.9%. As trade tensions and national security worries worsen, the United States is creating new plans to keep it from slipping farther behind Korea, Taiwan, and China in the region's semiconductor production. The rising electronics sector and semiconductor solutions in North America are likely to propel the industry forward. Deposition equipment makes copper electrodes, High-K dielectric gate stacks, and copper barrier/seed layers, among other semiconductor categories. The rising need for electronic components in the automobile industry is predicted to boost semiconductor demand, favorably impacting the chemical vapor deposition market. For decades, American corporations have been at the forefront of developing processors that fuel modern technology. The United States' supremacy in semiconductors is a significant cause for the country's economic dominance and technological prowess. The semiconductor sector in the United States has maintained its leading global position in critical future technologies such as artificial intelligence (AI), quantum computing, and sophisticated wireless networks like 5G. The active demand for semiconductor chips with the rise of future technology will directly propel the demand for CVD machines and equipment in the region.

Europe is the third largest region. Europe is home to many large and medium-sized semiconductor industries, such as Philips Semiconductor, STMicroelectronics, and Infineon Technologies, the three largest semiconductor manufacturing companies in Europe. The potential market for semiconductor producers and retailers will continue to rise as the globe becomes more reliant on technology, and thus will the chemical vapor deposition market in Europe. To avoid relying on the United States and Asia for the technology at the core of several of its most prominent businesses, the European Union is considering constructing an advanced semiconductor factory in Europe. The EU investigates ways to manufacture semiconductors with features smaller than 10 nm and, ultimately, chips as small as 2 nm. The intention is to reduce reliance on nations like Taiwan for the chips needed to power 5G wireless systems, connected cars, high-performance computing, and other technologies. For instance, TSMC's most affluent clients, like Apple, are headquartered in the United States, whereas its European clientele primarily comprises automakers purchasing less-advanced chips. In the first quarter of 2021, clients based in Europe and the Middle East only accounted for 6% of TSMC's revenue, far outpaced by 67% of sales from North America and 17% from the Asia Pacific. In addition, the growing investments in the country are set to impact the market growth rate.

Segmental Analysis

The global semiconductor chemical vapor deposition equipment market is segmented by application and region. 

By Application, the global semiconductor chemical vapor deposition equipment market is segmented into Foundry, Integrated Device Manufacturer (IDM), and Memory Manufacturers. The Integrated Device Manufacturer (IDM) dominated the market and is anticipated to register a CAGR of 9% during the forecast period. The Integrated device manufacturer (IDM) includes logic, sensors, optoelectronics, and discrete components. (Excluding Memory Manufacturers). A manufacturer of integrated devices creates and markets integrated circuits (ICs) (IDM). A traditional IDM manufactures its branded chips at a fabrication facility and designs them. While other manufacturers are abandoning planar architectures in favor of complex, three-dimensional (3D) structures for logic and memory, IDMs pursue node scaling beyond 10 nm to 5 nm and even 3 nm. An essential stage in the production of integrated circuits is thin-film deposition (ICs). The method used most frequently for thin-film growth is CVD. To create a film on the wafer in CVD, precursors and reactants are mixed in a process chamber before being given in a steady state. Over the period, the demand for semiconductor ICs is estimated to be propelled by the rise in consumer electronics and microelectronics sales. However, it's anticipated that the increased demand for semiconductor ICs would improve semiconductor device manufacturers' manufacturing capacity, which might increase the market's need for chemical vapor deposition.

The second-largest sector is Memory Manufacturers. One of the main product categories in the semiconductor business is memory semiconductors. With the growing consumption of data globally, the demand for memory products is increasing. Various vendors are expanding their memory businesses due to the growing demand from consumer electronics and data centers. In August 2020, Samsung began the mass production of its 16 GB LPDDR5 DRAM in its second production line in Pyeongtaek, South Korea. The company's third-generation 10-nm-class (1z) process, the new 16Gb LPDDR5, boasts the highest mobile memory performance and the largest capacity, providing consumers with benefits such as 5G and AI features. This will capitalize on growth in plasma-enhanced chemical vapor deposition. Additionally, starting in January 2022, ThermVac Inc., a Korean producer of specialized vacuum furnaces, will keep developing process technology and design and manufacturing technology for CVD equipment that can be used at temperatures between 900°C and 2,400°C to meet the demands of domestic and international clients. This is consistent with the rising demand in high-tech sectors like semiconductors, solar energy, mobile phones, aerospace, and defense for high-temperature heat-resistant CVD components.

Recent Developments

• September 2022 - Recently, Oxford Instruments announced the launch of their SiC substrate contactless plasma polishing solution. This technology aims to supersede the established chemical mechanical planarization CMP process with a clean, dry, lower cost, higher yield, and sustainable alternative. The project has taken a big step forward by collaborating with Clas-Sic and qualifying whole-wafer 1200V MOSFET devices, further boosting confidence in the new solution and its impact on SiC power semiconductor devices.
• November 2022 - Two new scientific CMOS cameras have been launched by Andor Technology, an Oxford Instruments firm and a global pioneer in scientific imaging solutions, especially for life science researchers. The addition of these new products strengthens Andor's wide range of cameras and microscopes equipment, and the business also provides industry-leading image analysis software in the form of Imaris.
• August 2022 - Oxford Instruments Plasma Technology announces a new alternative method of preparing SiC substrates for epitaxy today. Plasma polishing for SiC substrates has been demonstrated as a superior and HVM-compatible alternative to Chemical Mechanical Planarization (CMP) while alleviating significant technical, environmental, and supply-chain issues associated with CMP.
• September 2022 - Today, Oxford Instruments and its research partner Industrial Technology Research Institute (ITRI) can discuss cutting-edge technological advancements that will significantly help the fast-growing 5G, data center, and electric car markets. Compared to current devices, the technical advancements enable crucial transistor components to run at greater voltages, increasing performance and reliability and delivering a safer and more energy-efficient operation (often off "E-mode"). The AlGaN layer's recessed and insulated gate junction, which defines the new GaN (gallium nitride) HEMT device architecture, is known as the GaN MISHEMT.