Semiconductor Manufacturing Equipment Market

Market Overview

Semiconductor Manufacturing Equipment Market is anticipated to grow higher CAGR of 8% .

The semiconductor industry is considered as a broad market; semiconductor technology is crucial to driving numerous novel applications. Various emerging technologies, including 5G, artificial intelligence, and autonomous driving, are paving the way for the growth of the semiconductor market.

Semiconductor manufacturing equipment is critical for the implementation of fabrication processes. The manufacturing of semiconductors is an arduous activity and demands superior quality fab facilities. The semiconductor manufacturing equipment market is pegged to be a mature and geographically concentrated one with a limited number of large firms located in a few countries. These firms supply a significant share of the equipment.

Market Dynamics

Significant Spending by the Semiconductor Industry

The demand for semiconductor manufacturing equipment is surging with the rising investments by the semiconductor industry. This surge in spending can be majorly attributed to the escalating demand for ICs and electronic products in which semiconductor chips are incorporated. Moreover, various innovations are being implemented in consumer electronics products, which also aids in the growth of semiconductor spending. Technological innovations, including artificial intelligence and cloud computing, also aid the development of the semiconductor industry.

Semiconductor components are critical in the manufacturing of information technology products, and technology products without these components are hard to find. Therefore, the rising demand for various consumer electronics, storage devices, and servers will translate to an increase in the demand for semiconductor chips and related components, which will bolster the semiconductor manufacturing equipment industry.

The figure below indicates a comparison of the global semiconductor manufacturing equipment and semiconductor markets.

Growth of Modern Technologies, Including AI

Artificial intelligence is gaining traction in a majority of applications today. Deep neural networks and machine learning are among the key applications of artificial intelligence, and the practical implementation of these technologies necessitates advanced technologies of the semiconductor industry. Semiconductor manufacturing equipment plays a critical role in the production of semiconductors that are designed for artificial intelligence. Thus, the growth of artificial intelligence will create growth prospects for the semiconductor manufacturing equipment market.

Demand for Electric & ADAS Vehicles

The demand for electric vehicles, as well as autonomous and connected vehicles, is increasing rapidly. The rising need for fuel-efficient vehicles, coupled with government regulations, drives the demand for these vehicles. Electric and autonomous vehicles require a significant number of chips and related semiconductor products for operation. Advanced Driver Assisted Systems (ADASs) are also gaining momentum with people desiring automation in every aspect of life. The semiconductor content in these vehicles is considerably high, as automation requires a large number of semiconductor chips and components.

A research study by Deloitte projects that partially automated cars will have about USD 100, and a fully automated car will have approximately USD 550 worth of semiconductor content. Several semiconductor devices such as microcontrollers and sensors are used in vehicle production, which is catalyzing the market growth. Moreover, electrification, automation, connectivity, and security will further add semiconductor products to the automotive market in the coming years.

The figure below indicates the average Advanced Driver Assisted System semiconductor content at different levels of automation.

In addition, the rising number of collaborations between semiconductor companies and OEMs, as well as tier-one automotive companies, will result in market progression. For instance, Mobileye, Intel, and BMW collaborated to build a fleet of 40 autonomous test vehicles. Audi collaborated with NVIDIA for the introduction of novel features to its A8 luxury sedan, which contains advanced systems that offer automated driving in intricate situations, including traffic jams.

Segmental Analysis

Wafer Processing Segment Dominates the Semiconductor Manufacturing Equipment Market on the Basis of Equipment Type

On the basis of equipment type, the global semiconductor manufacturing equipment market is classified into wafer processing/wafer manufacturing and assembly and testing equipment. The wafer processing segment dominates the market and is expected to remain the most prominent segment throughout the forecast period.

A research study by the United States International Trade Commission estimates that 85% of SME spending is targeted on front-end wafer manufacturing. The study also revealed that wafer sales of fab equipment in China doubled between 2013 and 2017. The wafer manufacturing process is complicated and sophisticated as it entails a high level of automation and digitalization.

In order to attain a competitive advantage and strengthen operational efficiency, the wafer manufacturing plants implement a combination of lean programs and industry 4.0 techniques. While lean initiatives aid waste reduction, industry 4.0 largely entails digitalization of the manufacturing sector.

Regional Analysis

Asia-Pacific Holds the Lion’s Share of the Market

Asia-Pacific dominates the global semiconductor manufacturing equipment market, backed by the presence of key players in China, South Korea, Japan, and Taiwan. The region has become a lucrative market with the growth of mobile communications as well as cloud computing technology. Some of the key factors driving market growth in the region’s prominent economies are listed below.

• Taiwan is home to several prominent semiconductor manufacturing equipment providers such as Taiwan Semiconductor Manufacturing Company and original design companies such as Foxconn Technology Group and Quanta Computer Incorporated.
• Japan is one of the primary suppliers of high-end equipment and semiconductor materials
• South Korea dominates the global HBM DRAM (dynamic random-access memory) market. Players based in Japan and South Korea rely on strategic partnerships and acquisitions to expand their market
• China leads the global market in semiconductor production and consumption statistics. The country is home to a substantial number of international firms engaged with the manufacturing of electronic products for the global market. China’s semiconductor consumption has surpassed its production for the last few years.

The figure below portrays shows the consumption and production of integrated circuits in China for the duration of 1999–2015.

China — Asia-Pacific Market’s Growth Engine

Multinational companies that intend to enter the China market must consider several factors, including technologies, government policies, and logistics. Realizing the position of the company is essential for a multinational organization before expanding to the China market.

In order to decrease its dependence on chip importing, China announced the Made in China 2025 initiative and a National Integrated Circuit Plan, which entail various strategies to develop a closed circuit semiconductor manufacturing environment that has independence at each stage of the manufacturing process.

China intends to develop superior quality fabrication facilities and foundries. Currently, China has approximately 30 new semiconductor manufacturing plants, and 13 of them are delivering foundry services. A majority of the new plants target memory chip fabrication facilities.

As per the National Memory Base Storage Plan, the country has announced the development of a certain number of semiconductor plants, which will be primarily engaged in memory chips manufacturing. The goal associated with the announcement is to enhance the capacity of domestic memory chip suppliers in the country.

Semiconductor Manufacturing Equipment Market Segmentation

By Type

• Wafer Processing/Wafer Manufacturing
• Assembly & Testing Equipment

By Application

• Fabrication Plant/Foundry
• Semiconductor Electronics Manufacturer
• Testing Home

By Dimension

• 2D
• 3D

By Region

• North America
• Europe
• Asia-Pacific
• South America
• The Middle East & Africa