Analysis & Market Insights of the Latest Trends In Semiconductor Manufacturing Equipment Industry

With a compound annual growth rate (CAGR) of 10.4% from 2023 to 2028, the market for semiconductor manufacturing equipment is expected to grow from USD 91.2 billion in 2023 to USD 149.8 billion. Some of the key reasons propelling the global market expansion are the widespread usage of 5G technology and the need for semiconductor parts in electric and hybrid vehicles.

Wireless communications have been pushed to new heights by 5G technology, opening up use cases that require extremely fast bandwidth, minimal latency, and great reliability. The construction of 5G network infrastructure is required to achieve faster data rates, better coverage, and improved spectral efficiency. By 2025, there will be 272 million 5G connections in North America, according to the Global System for Mobile Communications Association. The demand for advanced semiconductors is rising mostly due to the release of smartphones with 5G capabilities. The GSMA predicted that North America's usage of 5G smartphones would rise from 82% in 2021 to 85% by 2025. Accordingly, the number of 5G smartphones delivered in the United States is expected to reach 118.1 million in 2022, a 27.3% increase from the 92.8 million units shipped in 2021.

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Market Segmentation:

Lithography is likely to capture largest share of the front-end semiconductor equipment market during the forecast period

Using EUV lithography equipment is beneficial for manufacturers, as these equipment expose critical layers of wafers in just one step, resulting in reduced manufacturing costs of semiconductor devices. Also, various countries are supporting companies operating in the photolithography equipment market through funding. For instance, the Defense Advanced Research Projects Agency (DARPA) of the US is funding research for the development of advanced IC architecture and design tools. Major players such as ASML, KLA Corporation, Intel Corporation, and Taiwan Semiconductor Manufacturing Company Limited have been making efforts to enhance the EUV lithography technology to further reduce the wafer size to around 5 nm. Thus, the lithography segment of front-end equipment is likely to capture the largest share of the semiconductor manufacturing equipment in the future.

The semiconductor manufacturing equipment market for 3D IC manufacturing is expected to grow at the highest CAGR during the forecast period

The semiconductor manufacturing equipment market for 3D IC manufacturing is expected to grow at the highest CAGR during the forecast period. The demand for 3D ICs is increasing as companies are trying to increase functional integration through multi-chip modules, silicon-in-package, and package-on-package schemes. 3D ICs contain multiple dies stacked, aligned, and bonded in a single package, using through-silicon vias (TSVs) and hybrid bonding techniques for inter-die communication. With the increased demand for improved functionality and miniaturization of portable devices such as cell phones, digital cameras, and laptop computers, manufacturers and IDMs are expected to opt for 3D ICs, thus bolstering the growth of this segment.

Regional Market Analysis:

Asia Pacific accounted for the largest share of the semiconductor manufacturing equipment market in 2022; a similar trend is likely to continue during the forecast period. The market in Asia Pacific is driven by continuous developments in the semiconductor industry, expansion of the semiconductor manufacturing equipment companies operating in the region, and financial support for the semiconductor industry by regional governments. For instance, in 2022, China announced a massive USD 143 billion investment plan aimed at bolstering its semiconductor sector amidst growing sanctions from the US that have impacted Chinese chipmakers. The investment will be made over a five-year period, with a significant portion dedicated to advancing manufacturing capabilities. The funding will be utilized for purchasing domestic semiconductor equipment for chip foundries, commonly referred to as fabs, with competent companies eligible for a subsidy of up to 20% of the equipment cost.

Key Market Players

The major players in the semiconductor manufacturing equipment Companies include Tokyo Electron Limited (Japan); Lam Research Corporation (US); ASML (Netherlands); Applied Materials, Inc. (US); KLA Corporation (US); SCREEN Holdings Co., Ltd. (Japan); Teradyne, Inc. (US); Advantest Corporation (Japan); Hitachi, Ltd. (Japan); Plasma-Therm (US).