Global semiconductor manufacturing equipment market is estimated to be USD 62.4 billion in 2020 and projected to reach USD 95.9 billion by 2025; at a CAGR of 9.0%. Key factors fueling the growth of this market include the increasing investments in R&D facilities due to COVID-19 impact, increasing demand for electric and hybrid vehicles, the growing consumer electronics market and increasing number of foundries due to COVID-19, trend of miniaturization and technology migration, and high demand for chips to provide computation power and connectivity for AI applications.
COVID-19 Impact on the Global Semiconductor
Manufacturing Equipment Market
The semiconductor manufacturing equipment market includes major
Tier 1 and 2 suppliers like Tokyo Electron, LAM Research, ASML, Applied
Materials, KLA-Tencor, SCREEN Holdings, Plasma-Therm, Onto Technology, Daifuku,
Teradyne, Advantest, and Hitachi High-Technologies. These suppliers have their
manufacturing facilities spread across various countries across Asia Pacific,
Europe, North America, South America, and RoW. The equipment manufactured by
these companies are used by fabrication plants and semiconductor facilities to
design and develop semiconductor chips and components. COVID-19 not only
impacted the operations of the various semiconductor manufacturing equipment
industries, but also affected the businesses of semiconductor companies. The
low demand for consumer electronic devices due to lockdown measures had a
global impact on the semiconductor market. The continuous fall in the global
demand and export shipments for automotive vehicles is also expected to
negatively impact the semiconductor market and eventually, slow down the demand
for semiconductor manufacturing equipment.
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Assembly and Packaging is
expected to witness the second largest market growth during the forecast period
Assembly and Packaging is expected to have the second largest
market growth during the forecast period, by back-end equipment type. Assembly
and packaging equipment help in designing the devices and making them robust
and durable to ensure long life and highest productivity. By using the assembly
equipment, the chips are attached to the circuit board through gold wiring.
Assembly and packaging equipment enable the chip to reduce electrical
interference, dissipate heat from the device, and provide protection to
electronic systems and conductors. Major foundries such as GlobalFoundries (US)
and Intel Corporation (US) are trying to penetrate in the APAC region to
satisfy the rising demand for electronics. These activities in the region have
increased the assembly and packaging equipment market share of APAC.
IDM firms to account for largest
market share of semiconductor manufacturing equipment in 2019
IDM firms are expected to be the largest and fastest growing
market by value during the forecast period. IDM companies are investing heavily
in R&D activities to develop technologically advanced, energy-efficient,
and miniaturized products, such as RFID circuits, smart ICs, ultra-low-power
microcontrollers, sensors, for consumer electronics, automotive, and industrial
applications. For instance, in 2018, Texas Instruments and Samsung invested USD
1.6 billion and USD 16.8 billion, respectively, in research and development of
technologically advanced and miniaturized products. Also, the IDM firms is
expected to remain dominant in future due to the growing number of
semiconductor fabrication plants operated by IDMs across the world.
2D ICs segment is expected to
witness largest market share in 2020
The 2D ICs segment is expected to register largest market share
in 2020, by dimension. The primary reason for the high market share of 2D IC is
its low initial cost as compared to 2.5D and 3D. The second largest market
share is expected to be captured by 2.5D ICs which offers better
miniaturization to address different challenges such as dense and complex
designs, need for low power consumption, and the requirement of increased
functionalities.
Asia Pacific is the leading
semiconductor manufacturing equipment market, globally, by market share, in
2019
The development of semiconductor devices in Asian economies such
as China, Japan, South Korea, and Taiwan drives the semiconductor manufacturing
equipment market in the region. APAC is the hub for the consumer electronics
market, which is served by several fabrication plants present in the APAC
region. China, Japan, South Korea, and Taiwan own the maximum number of
fabrication plants worldwide. Favorable economic conditions and cheap labor
costs in APAC are the key driving factors for the significant share in this
market. The region is one of the largest markets for electric and autonomous
vehicles globally and has also witnessed high demand for consumer electronics
in past years. This has spurred the growth of semiconductors products and in
turn, drives the market for semiconductor manufacturing equipment.
Key Market Players
The semiconductor manufacturing equipment market is dominated by
a few globally established players such as Tokyo
Electron (Japan), LAM
Research (US), ASML (Netherlands), Applied Materials (US), and KLA-Tencor (US).
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