The 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.

Market Dynamics

Driver: Growing consumer electronics market and increasing number of foundries due to COVID-19

Consumer electronics is one of the largest segments, which is solely dependent on the semiconductor industry. Consumer electronics is a huge application in the electronics industry, it boosts the global semiconductor manufacturing equipment market. The number of foundries globally has increased because of the increasing demand for consumer electronic devices. Changing chip sizes and innovative architectures in different electronic devices have uplifted the demand in the semiconductor industry, which has largely benefitted semiconductor equipment manufacturers.

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Restraint: Complexity of patterns and functional defects in manufacturing process

Tiny dust particles affect the overall semiconductor manufacturing and fabrication process which require clean room and clean equipment for manufacturing. Moreover, manufacturing defects also causes a delay in supply and can cause additional loss in the form of order cancellation and shift of customers to other suppliers. The complexity of patterns increases because of multiple patterns on a chip at a very small scale. This requires high accuracy for transferring accurate data to the chip. The complexity of wafers has increased with the need for size reduction and high density of semiconductor chips has resulted in, which ultimately decreases lithography wavelength. The shrinkage in node size will make photomasks and wafers more complex, which will consequently result in the need for new semiconductor manufacturing equipment. All these factors inhibit the growth of the semiconductor manufacturing equipment market.

Opportunity: Expanding chip industry in China

China is one of the high-growth markets for semiconductor manufacturing equipment. The country is also one of the major manufacturers and supplier of electronic items globally. The high demand for electronics devices has resulted in an increasing need for ICs, which has created several opportunities for the semiconductor industry in the country. China houses around 289 semiconductor wafer fabrication or packaging and testing plants across 20 different provinces. In addition, the country has witnessed several semiconductor equipment research and manufacturing related programs and initiatives, and various government investments to promote the development of domestically manufactured equipment. As a result, the local equipment manufacturing market has experienced the emergence of several prominent domestic companies in the semiconductor manufacturing equipment industry.

Challenges: Technical problems faced during fabrication process

The electrostatic charge creates problems which makes it difficult to maintain high levels of yield and product quality in semiconductor manufacturing. A failure in static charge control could result in electrostatic discharge (ESD) damage, particle contamination, and equipment problems. These problems become evident during the semiconductor manufacturing processes including photomask manufacturing, silicon wafer manufacturing, back-end assembling, packaging, front-end device manufacturing, and testing. For instance, during photolithography process, it is important to transfer the information present on the mask to the manufactured ICs otherwise technical difficulties could be experienced. This is a huge challenge faced by companies, as there is no tool to find defective ICs.