The global semiconductor lithography equipment market was valued at USD 14.9 billion in 2021. It is expected to reach USD 31.05 billion by 2030, growing at a CAGR of 8.5% during the forecast period (2022–2030). Electrical circuits at the nanometer scale are present in many electrical components and devices, including memory chips and computer microprocessors, and they are patterned using semiconductor lithography technology. Semiconductor lithography equipment is crucial when creating new technology products that integrate semiconductor circuits. High-complexity circuit patterns produced on a photomask made of a sizable glass plate are reduced using ultra-high-performance lenses and exposed onto a silicon substrate known as a wafer utilizing a semiconductor lithography system.
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Rising Demand for Miniaturization and Additional Functionality in Advanced Mobile Devices and Electric Vehicles
The automotive industry uses electronic components crucial for safety and is exposed to high voltages and harsh environmental conditions, driving about 80% of current automotive innovation. Developing new line semiconductors for automotive applications is therefore mandated for manufacturers. Intelligence, connectivity, sensing, and control applications are developing rapidly to keep up with the complexity of designing safer, more environmentally friendly, and intelligent vehicles. Every new application necessitates further development in semiconductor chip manufacturing's patterning process, which drives up the overall semiconductor deployment in today's high-tech cars.
Growing Innovation by Top-Tier Semiconductor Suppliers and Vendors
Factors such as growing innovation by specialized equipment vendors (like Veeco, SUSS MicroTec, EV Group (EVG), and SMEE), offering brand-new lithography tools, especially for the "More than Moore" (MtM) industry, are expected to drive the market growth during the forecast period. These include the rising demand for miniaturization and additional functionality by electric vehicles and advanced mobile devices.
In addition, leading semiconductor equipment manufacturers, such as ASML, Nikon, and Canon, strongly encourage the development of new lithography tools. Canon USA Inc. announced in December 2020 that its parent company, Canon Inc., might start selling the FPA-3030i5a in March 2021. The company's line-up of i-line1 semiconductor lithography systems supporting the production of devices, including compound semiconductors, now includes the FPA-3030i5a. Additionally, the FPA-3030i5a is made to assist in lowering the cost of ownership (CoO), a measure of the overall expenses related to semiconductor manufacturing. Such quick manufacturer changes are anticipated to attract customers' attention and accelerate market expansion during the forecast period.
Complexity in Manufacturing Process Patterns
Moore's Law defines density as the number of semiconductor chips crammed into a given 2D space. The chip area must be considered because it directly affects how much a chip costs. Some experts think that the semiconductor can no longer be made any smaller. Although such rapid size reduction enables faster processing and more cost-effective power efficiency, it also increases design complexity and poses several manufacturing challenges.
Numerous factors limit the semiconductor's lithography process at such a small scale. Dealing with complexity at the atomic level is one of the critical difficulties. In the lithography process, the wafer's surface is either etched (material is removed) or has layers deposited before the pattern is transferred from the photoresist to the wafer. The dopant materials are then added to the wafer in the pattern, section by section. At this point, removing the formed patterns without harming the underlying wafer becomes incredibly difficult.
Growing Demand in Various End-User Industries
The exponential growth of semiconductors in many end-user industries is expected to boost the semiconductor lithography equipment market in the coming years. The semiconductor IC market is increasing, expanding the global market. EUV expansion is also fueling DUV demand. ASML's sales of EUV systems, which support memory and logic high-volume manufacturing, increased by 60% in 2020. Also, DUV systems revenue was nearly 1 billion more than EUV machines in 2020. The global market is expanding to miniaturize circuit patterns, requiring significant capital investment.
Some vendors are developing next-generation semiconductor manufacturing equipment to miniaturize circuit patterns and reduce manufacturing costs. Advanced packaging technologies like FO/FI WLP, Flip Chip, 3D stacking, interposers, and embedded die are growing in the semiconductor market to meet the demand for better performance, lower power consumption, and smaller geometries in mobile and automotive applications. These factors will boost the global semiconductor lithography equipment market over the forecast period.
The global semiconductor lithography equipment market is segmented by type and application.
Based on type, the global market is bifurcated into deep ultraviolet Lithography (DUV) and extreme ultraviolet lithography (EUV).
The deep ultraviolet lithography (DUV) segment is the highest contributor to the market and is expected to grow at a CAGR of 8.84% during the forecast period. The growth of semiconductors in many end-user industries will boost the semiconductor lithography equipment market in the coming years. As the semiconductor IC market grows, so will the market segment. ASML's EUV sales increased by 60% in 2020, supporting high-volume memory and logic manufacturing. In 2020, DUV systems generated nearly USD 1 billion more than EUV machines. The market segment is growing to reduce circuit pattern size, which requires a significant investment.
Some vendors are developing next-generation semiconductor manufacturing equipment to miniaturize circuit patterns and reduce costs. Advanced packaging technologies like FO/FI WLP, Flip Chip, 3D stacking, interposers, and embedded die are expanding in the semiconductor market to meet the demand for better performance, lower power consumption, and smaller geometries in mobile and automotive applications.
Over the years, advances in semiconductor lithography equipment have included adopting large lenses with high numerical apertures (NA) or using short wavelength light as the light source. However, the patterning capacity of current liquid immersion ArF lithography equipment reaches its limit as gate length decreases below 30 nm. Extreme ultraviolet lithography technology, or EUV in the semiconductor industry, is expected to significantly advance photolithography, one of the most crucial steps in producing semiconductors. The photolithography step may now be accomplished by a EUV system using a light source with an "extreme ultraviolet" wavelength thanks to advances in EUV technology. Realizing more OK circuits is essential for chip manufacturing because it allows for integrating a more significant number of components inside a chip, leading to the construction of faster and more energy-efficient chips.
Based on application, the global market is bifurcated into advanced packaging, MEMS devices, and LED devices.
The MEMS devices segment owns the highest market share and is expected to grow at a CAGR of 9.03% during the forecast period. CMOS image sensors, Power and RF devices, and MEMS are included in the segment. Microfabrication combines micro-mechanical parts, electrical circuits, sensors, and actuators on a single substrate to create MEMS, a high-value device. The MEMS technique is based on etching, photolithography, and film deposition. The pressure, gyroscope, and accelerometer components of an automotive MEMS device. These devices are batch-fabricated in factories using various technologies. MEMS and advanced packaging have unique lithography needs. Packaging, MEMS, and Sensor devices have higher customer adoption requirements for overlay, resolution, sidewall angle, DOF, wafer handling for wafer bow, and backside alignment.
For many semiconductor companies in the last ten years, advanced packaging has become increasingly important. These semiconductor firms are reorienting their efforts to improve cutting-edge packaging-related procedures. Modern packaging technology has developed to reduce costs and boost ICs' overall throughput and performance. For advanced patterning packages that house cutting-edge ICs, such as flip-chip, 2.5D/3D packaging, fan-out wafer level packaging (FO-WLP), and fan-in wafer level chip scale packaging (WLCSP), lithography equipment is used.
Demand from the automotive, mobile, and high-power computing industries propels the development of advanced packaging technologies like system-in-package (SiP) and fan-out packages (FOWLP and FOPLP). With significant intrafield variation, the new JetStep systems can accommodate critical customer roadmap requirements like ultra-fine SiP interconnects and large 50mm package sizes with a submicron lens option. With this field-tested lens' recipe-controlled variable numerical aperture, customers can balance field size and resolution for a broader range of applications.
Asia-Pacific Dominates the Global Market
By region, the global semiconductor lithography equipment market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
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Asia-Pacific is the most significant shareholder in the global semiconductor lithography equipment market and is expected to grow at a CAGR of 10.13% during the forecast period. Chinese semiconductor producers are also using old chipmaking machines as they scramble to produce domestic goods in the face of US-Sino trade tensions, driving up equipment prices in Japan's secondary market. Japanese dealers in used equipment claim that prices are up 20% from the previous year. The U.S. sanctions against China do not apply to older machines, allowing Chinese players full access. Another factor is the rise in stay-at-home behavior brought on by the coronavirus pandemic. Even less modern equipment is selling quickly as chip demand increases globally. As a result, the shortage of semiconductors used in automobiles may continue.
However, in August 2020, Taiwanese Semiconductor Manufacturing Company, one of the most prominent vendors on the market, ASML Holding NV, unveiled a brand-new, cutting-edge training facility in Tainan (TSMC). Engineers from the chipmaker will learn how to use the extreme ultraviolet (EUV) lithography machines from the Dutch brand staff members. The region is seeing rising investments in foundries to increase production due to the rising demand from various industries.
North America is expected to grow at a CAGR of 9.22%, generating USD 9.77 billion during the forecast period. All semiconductor segments benefit from strong U.S. capabilities and R&D dominance. However, it lacks companies in some important subsectors, particularly photolithography tools (the most expensive and complex form of SME). Due to this, the United States is innovating in semiconductor manufacturing, design, and research. Additionally, a leader in semiconductor packaging innovation, the U.S. has 80 wafer fabrication facilities across 19 states. The demand for small integrated circuits is driven by technological developments in consumer electronics, including smartphones, tablets, smart home devices, and wearables. This results in a greater demand for lithography equipment.
The demand for semiconductor silicon wafers in Europe is anticipated to rise due to the increased demand for electric vehicles, clean energy, expanding data centers, 5G, and automated manufacturing, all of which require electronic components. Additionally, in recent years, the demand for cutting-edge chips used in new electronics, automobiles, medical equipment, and smartphones has increased. The production of electric vehicles in the European Union (E.U.) is anticipated to increase six-fold between 2019 and 2025, according to forecast data from the clean transportation advocacy group Transport & Environment.
Additionally, according to T&E, the E.U. region will produce 4 million electric cars and vans in 2025, or about one-fifth of all the automobiles built there. Businesses from various regions buy European vendors to maintain and strengthen their market positions and control the supply chain. In addition, many players are forming strategic alliances to provide the best technologically advanced equipment to meet the rising demand from the end-user industries to compete with the market's increasing competition.
All the developing nations in Latin America and the Middle East and Africa are included in the rest of the world. International players occupy a large portion of the regional market. The main application for silicon wafers used in integrated circuits is the smartphone. Since about 75% of Mexicans own a phone, the smartphone market in that country has been highly competitive. In the past, businesses have added a variety of new, battery-intensive sensors. Smartphone chargers that can charge the device in a concise amount of time are being developed by the manufacturers. Mexico's growing number of auto manufacturing facilities can be attributed to its industrial sector. In the central part of Mexico, new facilities for Nissan, Honda, and Mazda have opened. These businesses are anticipated to produce electric vehicles, expanding the market.
The global semiconductor lithography equipment market’s major key players are Canon Inc., Nikon Corporation, ASML Holding NV, Veeco Instruments Inc., SÜSS MicroTec SE, Shanghai Micro Electronics Equipment (Group) Co. Ltd, EV Group (EVG), JEOL Ltd, Onto Innovation (Rudolph Technologies Inc.), and Neutronix Quintel Inc (NXQ).