Semiconductor Etch Equipment Market

Market Overview

The global semiconductor etch equipment market size was valued at USD 22,687.41 million in 2023. It is estimated to reach USD 33,173.56 million by 2032, growing at a CAGR of 4.8% during the forecast period (2024–2032).

Semiconductor etch equipment is a tool used to remove specific materials from the surface of a silicon wafer substrate via wet or dry etching. The wet etch technique utilizes a chemical to remove selective material from the substrate of a silicon wafer. Wet chemical procedures have historically been essential to etching out patterns. In addition, dry etching techniques replaced wet chemical etching as system component size reduced and the significance of interface topographies rose. The isotropic makeup of wet etching mostly brought about this alteration.

The size of the structures differs because wet etching removes material in all dimensions. Dry etching can be used to remove material via physical methods like ion impact followed by material expulsion from the surface or chemical processes that convert the surface into reactive gaseous species that can be blown away. Every dry etching technique is conducted in a vacuum, where pressure influences the etch phenomenon to some amount. The semiconductor's surface is etched to remove material and produce patterns according to the uses. It is employed in the manufacturing of semiconductor devices.

Market Dynamics

Global Semiconductor Etch Equipment Market Drivers:

Increase in Capital Spending on Semiconductor Processing

The development of semiconductors following Moore's law and the consistent growth of the industry has been made possible by substantial investment and international cooperation. The industry's expansion will probably continue to be fueled by continued investment. The government's expanding involvement in the semiconductor sector is another important element boosting demand for semiconductor etching equipment. For instance, China's government focuses on assisting the chip industry and has budgeted more than USD 150 billion in investments by 2030 to kick-start semiconductor production.

As the global chip shortage persists, semiconductor firms worldwide are preparing to invest significantly in their R&D facilities to keep up with rising demand. Many significant players are making investments in the growth of their fabrication facilities. For instance, Bosch said in February 2022 that it would expand the scale of its Reutlingen, Germany, wafer production facility. By 2025, it intends to have built more manufacturing space and the requisite clean-room amenities for more than EUR 250 million. Such growth investments are promoting the market for semiconductor etching equipment.

Expanding Use in the Automobile Industry

Semiconductors are used in today's high-tech automobiles for vital operations like sensing, safety features, displays, control, and power management of the vehicle. Semiconductors are used in more electric and hybrid cars (EVs), which are expanding significantly. Safety systems and semi-autonomous driving assistance systems are made possible by semiconductor devices. In addition, blind-spot detection systems, backup cameras, collision-avoidance sensors, adaptive cruise controls, lane-change assistance, airbag deployment sensors, and emergency braking systems are examples of smart features made possible by semiconductors, thereby accelerating the market's expansion.

Global Semiconductor Etch Equipment Market Restraint:

Trade Uncertainties and Semiconductor Memory Markets

The consequences of the US-Chinese trade war and global political uncertainty affect the electronics industry. Slowing semiconductor industry conditions are tied to uncertainty in the global economy, which is generally attributed to the ongoing trade disagreement between China and the US, the slowing of the Chinese economy, and sluggishness. In addition, semiconductors have a complex manufacturing supply chain and are an extensively traded commodity. Overly complicated customs and trade laws, processes, and practices can severely disrupt semiconductor supply chains and create expensive obstacles that hurt consumers and businesses. Such factors may restrain the market growth.

Global Semiconductor Etch Equipment Market Opportunities:

Rapid Technological Advancement and Transition

Nowadays, semiconductors underpin the most exciting "must-win" technologies of the future, including artificial intelligence, quantum computing, and advanced wireless networks. As the world quickly adds innovative technologies to nearly every facet of life, semiconductors, and microelectronics are also advancing to meet the complex needs of an ever-evolving digital landscape. In addition, Big data and artificial intelligence accelerate this growth and require more minor, more powerful chips, which means their fabrication will become more challenging and require technological advances. This has led to the innovation of new product launches in the market.

For instance, Lam Research introduced a new line of selective etch devices in February 2022 that use innovative wafer fabrication techniques and unique chemistries to help chipmakers construct gate-all-around (GAA) transistor architectures. Lam's selective etch portfolio, which includes three new products: Argos, PrevosTM, and Selis, gives a significant advantage in the design and fabrication of advanced logic and memory semiconductor systems. Thus, the factors above create opportunities for the growth of the global market.

Regional Analysis

Based on region, the global semiconductor etch equipment market is bifurcated into North America, Europe, Asia-Pacific, and the Rest of the World.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global semiconductor etch equipment market shareholder and is anticipated to exhibit a CAGR of 4.3% during the forecast period. The Asia-Pacific region has the largest semiconductor foundries worldwide, with significant companies such as TSMC, Samsung Electronics, etc., located there. Taiwan, Japan, South Korea, and China are major countries with significant market shares in the region. China has a very ambitious plan for semiconductors. With 150 billion dollars in funding, the country is developing its domestic IC industry and intends to produce more circuits. Greater China, consisting of Hong Kong, China, and Taiwan, is a geopolitical flashpoint. Many Chinese companies are compelled to invest in their semiconductor foundries due to the US-China trade war aggravating tensions in a region with the most advanced process technology.

In addition, India's economy is currently one of the fastest-growing in the world due to its massive population. According to forecasts, the country's automotive semiconductors market will grow substantially in the following few years. The automotive industry's strong semiconductor R&D infrastructure will create new opportunities for the Indian semiconductor etch market in the coming years.

North America is estimated to exhibit a CAGR of 3.9% over the forecast period. The United States is creating new plans for the North American region as trade tensions and national security worries intensify to keep it from lagging behind Korea, Taiwan, and possibly even China in producing semiconductors. The United States government has asked for USD 50 billion in financing in 2021 to support local chip manufacturing. The US state of Arizona is home to chip plants, and TSMC is considering investing tens of billions more there than previously stated. The US government's subsidies for TSMC's plant construction will likely put it against Intel Corp. and Samsung Electronics Co. Ltd. in a competitive market.

Furthermore, Canada is witnessing significant partnership activities in the market. For instance, in October 2020, ventureLAB announced a new partnership with TSMC to expand the Hardware Catalyst Initiative's reach and further support innovative Canadian tech firms. The supply of semiconductor chips, which are utilized in creating various items, including automobiles, has recently begun to fall short of global demand. In addition, chip manufacturers are factoring in the strong demand for their products into their future forecasts as semiconductor scarcity continues to drag on the automotive and other electrical-intensive industries.

In Europe, electronics integration in the automotive industry fueled the rise of semiconductor manufacturing equipment. Increased demand for semiconductors in advanced automation, artificial intelligence, and Internet of Things (IoT) applications is expected to grow the semiconductor etch equipment market over the forecast period. The automotive and industrial sectors may have greater potential than other industries due to the volumetric implementations of semiconductors that drive the demand for semiconductor etch equipment. The European Union is considering constructing a cutting-edge European semiconductor plant to stop relying on the United States and China for the technology at the core of several of its biggest industries. In addition, the EU is looking into ways to make semiconductors with features smaller than 10 nm and, eventually, chips as thin as 2 nm. In order to power 5G wireless systems, connected autos, high-performance computers, etc., less reliance on nations like Taiwan for chip production is desired. Therefore, the factors mentioned above propel the regional market expansion.

In the RoW, the semiconductor market etch equipment is highly concentrated in a few regions, and sales of this equipment are very narrow or non-existent in major outside regions. Therefore, in the current market scenario, etch equipment sales are zero or extremely low in the Rest of the World (including Latin America and the Middle East and Africa). However, this region has a few potential aspects that might ignite the demand for semiconductor fabrication equipment over the forecast period.

Segmental Analysis

The global semiconductor etch equipment market is segmented by product type, etching film type, price range, and application.

Based on product type, the global market is divided into high-density etch equipment and low-density etch equipment. 

The high-density etch equipment segment is responsible for the highest market share and is anticipated to exhibit a CAGR of 5.5% over the forecast period. The performance of a microelectronic system depends on the density of devices integrated into the system. Silicon (Si) interposers have received increasing attention in the microelectronic packaging industry due to their potential application in the emerging 2.5D system integration. It provides a technologically promising and economically viable way for achieving high-density interconnects in a microelectronic system. In addition, the semiconductor industry's revival and expansion will depend heavily on technological innovation in the next years. The market can see evidence of such innovation in the new chipset approach to developing powerful processors quickly.

A low mass density is highly desired; weight matters with all things launched into space. Current commercial launch rates are ~USD 5000–6500 per pound. Ease of machinability is also desired, as these small quantities of specially designed components are usually machined. In addition, the family of ceramic materials that satisfy these requirements is various BN-SiO2-based composites first developed and utilized in the USSR/Russia and subsequently refined for use in the United States. Structuring silicon using plasma etching is among the most extensively used techniques for fabricating silicon-based devices and molds, mostly when high-dimensional fidelity and verticality are required.

Based on etching film type, the global market is divided into conductor etching, dielectric etching, and polysilicon etching. 

The conductor etching segment owns the highest market share and is estimated to grow at a CAGR of 4.6% over the forecast period. Conductor etching equipment is extensively used to shape the electrically activated materials in various semiconductor device components. Even the slightest variation in these small semiconductor structures can result in an electrical defect that compromises the device's performance. The conductor etches designs are so small that the etching process tends to push the physical boundaries of the basic wafer sizes. In addition, conductor etching is performed by applying electromagnetic combustion energy to a gas that contains a chemically sensitive element, like fluorine. The growth of the Conductor Etching Systems market is highly reliant on the evolution of the overall semiconductor equipment market globally.

Dielectric etch processes remove non-conductive materials during the manufacturing of a semiconductor device. Leading-edge memory devices have especially challenging structures, such as extremely deep holes and trenches, that must be manufactured with tight tolerances. Silicon dioxide (SiO2) and silicon nitride (Si3N4) are two dielectrics commonly used in semiconductor processing as semiconductor device technology evolves with the reduction of feature dimensions, demand for dielectric film, and etchers supporting tight CD (critical size) control. As the era of 90-nm feature semiconductor devices approaches rapidly, the need for a dielectric etcher that can accommodate has emerged as a top priority.

Based on application, the global market is segmented into foundries, MEMS, sensors, and power devices.

One of the most common applications for semiconductor etching is foundries. Automation, machine learning, and analytics are becoming increasingly crucial for foundries. Demand is driven by these technologies' benefits, which include optimizing the manufacturing process and increasing yield without compromising quality. Due to the expanded production capacity and reduced pricing, vendors are expected to accept more manufacturing contracts, leading to a significantly larger supply and filling shortage gaps in several industries.

MEMS is the acronym for Micro-electromechanical systems. Process technology creates tiny systems and integrated devices that combine electrical and mechanical components. One of the key advantages of this technology is that the same material can be used to manufacture mechanical parts and electronic circuits in the same substrate, which is usually silicon. Etching is a crucial stage in the MEMS production process since it is required to etch either the substrate or the thin films that have already been deposited to create a functional MEMS structure.

Recent Developments

• July 2022- Lam Research, Entegris, and Gelest collaborated to advance the EUV Dry Resist Technology Ecosystem. The companies collaborated to expedite the future development of cost-effective dry-resist solutions. The reduced depth of focus requirements of high-NA EUV are met by dry resist's high etch resistance and tunable deposition and growth thickness scaling.
• June 2022- AlixLab developed a novel, innovative method for producing semiconductor parts with a high degree of packing, eliminating some steps in the production process - Atomic Layer Etch Pitch Splitting (APS). According to the business, the technique reduces the cost and resource requirements of the components. Additionally, the business disclosed that the equipment hook-up for Atomic Layer Etch (ALE) in its clean room at ProNano RISE in Lund, Sweden, had been finished.