Semiconductor Materials Market

Market Overview

The global semiconductor materials market size was valued at USD 57.02 billion in 2021. It is expected to reach USD 70.9 billion by 2030, growing at a CAGR of 4.3% during the forecast period (2022–2030). The creation of semiconductor materials is one of the most significant technological developments in the electronics industry. The material is well-liked because of its strong electron mobility, wide operating temperature range, and low energy requirement. Semiconductors are materials with conductivity between that conductors and insulators or nonconductors. Semiconductors can either be pure elements like silicon or germanium or compounds like gallium arsenide or cadmium selenide. The price and availability of semiconducting materials range from abundant silicon to pricey rare earth elements. By utilizing silicon (Si), germanium (Ge), and gallium arsenide (GaAs), electronics makers have been able to replace previous thermionic devices, which rendered electronic gadgets cumbersome and immobile. Since the invention of semiconductor elements, a great deal of miniaturization has made electronic equipment smaller and more portable.

Semiconductor materials are an innovator in the worldwide electronics industry. Semiconductors were able to replace traditional thermionic devices, such as vacuum tubes, which rendered electronics immobile and large. This is owing to its remarkable features, which include solid electronic conductivity, a broad temperature range, and many more. The increasing rapid advancement of the electronics sector and the increasing acceptance of advanced consumer electronics products are some of the primary reasons driving capital investments in the semiconductor material market. Despite the semiconductor industry's turbulent market expansion, the increasing need for sophisticated product offerings compels market makers and end-user organizations to engage in semiconductor material construction.

Market Dynamics

Global Semiconductor Materials Market Drivers

Technological Developments and Product Innovations of Electronic Materials

Semiconductors are shifting from rigid substrates, cut or shaped into thin discs or wafers, to more flexible plastic and paper due to new material and production developments. Numerous products, including light-emitting diodes, solar cells, and transistors, have resulted from the trend toward flexible substrates. There are several applications for semiconductor materials in the production of electrical devices. For producing solar cells, radio detectors, high-performance RF devices, photo resistors, LED technologies, and microwave integrated circuits, semiconductor materials are in high demand in the electrical and electronics sectors. In addition, optoelectronic digital devices and connectivity in telecommunications are pushing the worldwide semiconductor materials industry.

Researchers at Georgia Tech developed material in 2021 that functions as a second layer of skin and can be stretched up to 200% beyond its initial size without severely losing its electrical current. According to the researchers, soft, flexible photodetectors could improve the effectiveness of implantable and wearable medical devices and other uses. The demand for artificial intelligence (AI) hardware is expected to increase significantly as the market expands because it now uses a lot of energy and costs a lot of money in the form of GPUs, FPGAs, and ASICs.

The market for semiconductor materials is expanding globally with the help of photodetectors, electronic devices, and wireless technologies. Semiconductor materials have a wide temperature range, high electrical conductivity, and low energy consumption, which are advantageous for electrical equipment. Additionally, light-emitting diodes and lasers both utilize semiconductors. Additionally, it has a lot of uses in the field of transportation. Semiconductors are utilized in various industries due to their excellent resistance to heat and radiation. In addition, escalating sales of smartphones and other wireless wearable technology are driving growth in the semiconductor materials industry.

Global Semiconductor Materials Market Restraint

Complexity in Manufacturing Process

The semiconductor business is regarded as one of the most complex due to the more than 500 processing steps required in the manufacture and varied products, as well as the challenging environment it encounters, such as the erratic demand and the volatile electronic market. The total manufacture of semiconductor wafers alone can involve up to 1,400 process stages, depending on the manufacturing process's complexity. The procedure is continued as several circuits are constructed to produce the finished product after transistors are generated on the lowest layer. Fabs need large volumes of liquid nitrogen to maintain the facility's environment and the FOUPs, which carry wafers.

Thin IC substrates are easily distorted, especially in protruding cases, where a board is less than 0.2mm thick. The costs involved with flip chips begin with suppliers of wafer substrates, fabrication suppliers, and assembly/packaging subcontractors. The higher prices are felt throughout the process, from wafer fabrication's repassivation and redistribution (RDL) through the substrate vendor's high-performance multilayer organic build-up substrates. And thus, the high cost and complexity related to semiconductor material restraints the expansion of the market.

Global Semiconductor Materials Market Opportunities

Increasing Adoption of AI, IoT, Data Analytics

AI's high processing performance necessitates rapidly deliverable semiconductor industry substrates, which are flexible and versatile, to keep up with ICT's advancements. The demand for quick and real-time processing is also fueled by expanding complex features in consumer electronics. Additionally, as IoT technology advances, capabilities like artificial intelligence (AI), data analytics, real-time data transfer, and processing are becoming standards for all modern devices, opening up a vast market opportunity for the vendors in the market under study. The market's primary focus is commercializing the substrate business for cheap packing and low thermal properties. One example is the launch of a semiconductor package substrate material by Panasonic's Industrial Solutions in 2021, which enables low package warpage and excellent assembly-level dependability.

In the age of artificial intelligence, hybrid clouds, and the Internet of Things, there is an increasing desire for more energy efficiency and chip performance. To improve skills and serve a more extensive clientele, Asian businesses intend to increase their capacity. SiC technology also offers better switching and thermal performance when compared to equivalent silicon devices. To meet the growing need for high-power uses in electric vehicles and other energy-related applications, new SiC designs are being created.

Regional Analysis

Asia-Pacific Dominates the Global Market

By region, the global semiconductor materials market is analyzed across North America, Europe, Asia-Pacific, and the Rest of the World.

Asia-Pacific will command the largest market share, with Taiwan and China being the most significant contributors. Taiwan will hold the largest share, expanding at a CAGR of 4.4% over the forecast period. One of the biggest producers of semiconductors worldwide is Taiwan. The nation's semiconductor sector is fueled by Taiwan Semiconductor Manufacturing Limited (TSMC), United Microelectronics Corporation, and other significant firms. The global shortage of semiconductors has also contributed to the rise of the semiconductor sector.

The need for semiconductors has expanded due to the rise in consumer electronics, linked devices, and other gadgets, and many end users depend on Taiwanese firms for semiconductors. The Chinese government's national strategy plan, Made in China 2025, has also played a crucial role in the publications' rise. The expansion of the semiconductor sector is the plan's primary objective. Additionally, the National Intellectual Property Administration of China (CNIP) budget for 2021 projects 2 million filings year through 2023, likely propelling the demand for semiconductor materials.

North America will witness significant growth in the market. Even though the consumption of semiconductors has migrated significantly toward Asia-Pacific over the past ten years, the United States has maintained its competitiveness in the North American region by effectively managing global design and manufacturing supply chains. The ability of the nation to keep high-value design and manufacturing work domestically while exporting low-value production has been a part of this strategy. The American semiconductor sector continues to dominate the market in the R&D-heavy areas of chip design, EDA and core IP, and manufacturing technology.

Numerous merchants in the area have formed partnerships to speed up regional growth. For instance, SkyWater Technology, the sole US-owned and operated pure-play trusted foundry, announced a public-private partnership with Osceola County, Florida, and BRIDG in January 2021 to speed up access to domestic development manufacturing services for advanced packaging for microelectronics. The United States has significantly impacted the industry, luring Taiwanese businesses away from Chinese manufacturers and domestic producers.

Segmental Analysis

The global semiconductor materials market is classified by application, end-user, and region.

By application, the global semiconductor materials market includes Fabrication and Packaging.

The Fabrication section is expected to hold the largest market share, growing at a CAGR of 4.72% over the forecast period. Fabrication is further sub-segmented into Process Chemicals, Photomasks, Electronic Gases, Photoresists Ancillaries, Sputtering Targets, Silicon, and Others. The Silicon segment will make the highest contribution to the section. Due to its resistance to extremely high temperatures and currents, silicon is currently the most widely used semiconductor in power electronic components, such as diodes, thyristors, IGBTs, and MOSFET transistors. Long life cycles, compact volume, lightweight, simple production, strong mechanical strength, low power requirements, and cost-effective production are the main benefits of silicon-based semiconductors. The use and popularity of silicon as a semiconductor material are also influenced by its physical characteristics.

The Packaging section will hold the second-largest market share. Packaging is further sub-segmented into Substrates, Lead Frames, Ceramic Packages, Bonding Wire, Encapsulation Resins (Liquid), Die Attach Materials, and Others. The substrate segment will contribute mainly to the packaging market. Electronic devices, including transistors, diodes, and particularly integrated circuits (ICs), are deposited on substrates constructed of semiconductor materials. To properly and swiftly remove the heat produced by the components from the conductor layers, the substrates must have a high thermal conductivity. Furthermore, substrates have seen considerable growth among all other types due to their use as the foundation for circuit boards and the creation of compact assemblies.

By end-user, the global semiconductor materials market includes Consumer Electronics, Telecommunications, Manufacturing, Automotive, Energy & Utility, and Others.

The Consumer Electronics section is projected to advance at a CAGR of 4.2% and hold the largest market share over the forecast period. Consumer electronics' rising popularity and affordability have impacted the development of semiconductor materials. The complicated implementation of semiconductor materials required by consumer devices, such as laptops, tablets, mobile phones, and smartwatches, is causing the industry to rise in this sector. Due to their superior capabilities over conventional silicon technology, silicon carbide (SiC) and gallium nitride (GaN) semiconductor materials are in high demand in consumer electronics. These materials allow power devices to operate at high voltages, temperatures, and switching frequencies.

The Telecommunication section will hold the second-largest market share. For traditional microelectronics applications like analog and digital integrated circuits, silicon material is typically employed. This includes many applications in all the telecommunications equipment used in offices and homes. Compound semiconductors are used in various niche markets for specific characteristics like wide bandgap, high mobility, and direct bandgap. These semiconductors are produced using risky and expensive raw materials.

Recent Developments

• 2022 - BASF SE and Confoil jointly launched DualPakECOâ. The paper tray's interior is coated with ecovio® PS 1606 from BASF, a partially bio-based and certified biodegradable biopolymer explicitly developed for coating paper or board food packaging.