Principal factors encouraging the growth of this market include the growing demand for smart cards, RFID technology, and automotive power ICs, increasing consumer electronics market, an increase in the number of factories, and the inclination of miniaturization and technology migration.

- The dicing equipment market is getting traction due to the inclusion of microelectronics across consumer electronics. The need for technologies such as MEMS devices and power devices are encouraging demand for thin wafers. Additionally, this demand supports the demand for better manufacturing processes, which is a critical phase in the ultra-thin wafer manufacturing processes.

- Driven by the rising demand for secure access and identification solutions in the telecommunication, payment, government, and transportation sectors, smart cards have experienced a significant increase in their usage, therefore boosting the dicing equipment market's growth. For example, according to the Office of National Statistics (UK), the country’s manufacturers of smart cards witnessed sales of GBP 2.2 million in 2018.

- India is making accelerated strides in bridging the digital payments divide. The new directive from the Finance Ministry advising banks to issue Near-Field Communication (NFC)-enabled contactless credit and debit cards could be an impetus in the correct direction. These factors drive the use of wireless technology, such as RFID, in smart cards, thereby creating a need for thin wafers, thus fueling market growth.

- Furthermore, the increasing electronic components in a vehicle or an automobile is a key driver, particularly in hybrid and electric cars, due to the consumer demand for constant connectivity. According to estimates from Wedbush Securities, Tesla already received 650,000 pre-orders for the Cybertruck in 2020, which is scheduled to hit the roads in late 2021.

- The automotive industry’s push to deliver autonomous and electric vehicles in the next decade is also driving the growth for the market studied. For instance, according to the International Energy Agency’s Global EV Outlook, electric passenger car sales rose to 2.1 million in 2019, making the global stock to 7.2 million electric and plug-in hybrid passenger cars.

- Blade dicing has been the most widely used process in the separation of silicon wafers into individual chips/devices, both in MEMS and semiconductor technologies. It is also the low-cost dicing technology in many applications.

- The demand for minimum power consumption, decreasing heat, and increasing smartphone usage in the emerging countries is expected to drive the utilization of DRAM (dynamic RAM) in mobile devices.

- Furthermore, the evolution of 5G technology, coupled with artificial intelligence (AI) powered mobile applications, demands low-power cellular memory solutions. Networking devices, like servers, CPUs, GPUS by enterprises and cloud service providers, also provide memory manufacturers with opportunities, hence boosting the market growth.

Key Market Trends

Memory and Logic (TSV)​ Application to Dominate the Market

- Companies have been seeking to find a single universal memory that combines the benefits of SRAM, Flash memory, and DRAM. New technologies in memory devices, such as Magnetoresistive random-access memory (MRAM), Phase-change random access memory (PCRAM), and Resistive random-access memory (RRAM), are expected to substitute most of the traditional technologies. This shift in the market has necessitated the change in manufacturing equipment dynamics, forcing equipment providers to develop effective designs for the device manufacturers.

- As data generation grows significantly, cloud data centers need order-of-magnitude enhancements in the speed and power consumption of the data pathways linking servers and storage systems. PCRAM and ReRAM are fast, low-power, and high-density memories, which can be used as “storage-class memory” to fill the widening price-performance gap between server DRAM and storage.

- The demand for minimum power consumption, decreasing heat, and increasing smartphone usage in the emerging countries is expected to drive the utilization of DRAM (dynamic RAM) in mobile devices. Furthermore, the evolution of 5G technology, coupled with artificial intelligence (AI) powered mobile applications, demands low-power cellular memory solutions. Networking devices, like servers, CPUs, GPUS by enterprises, and cloud service providers, also provide memory manufacturers opportunities.

- At the Data Center Investment Conference & Expo South, it was discussed that 4,000 new data centers might be needed to accommodate the data growth and the need for edge computing across the United States, by 2020. With the volume of digital traffic expected to triple over the next five years, the dependency on the data centers is expected to increase significantly, and thus, providing scope for memory ICs for networking devices, like servers.

- With TSV (Through Silicon Via) technology gaining popularity for low power and high-performance devices, like mobile, and other wireless and networking devices, the scope for stealth dicing equipment increases. As TSV enables 2.5/3D package for the applications mentioned above, the equipment becomes handy for TSV Assembly/Packaging (chip-to-chip and chip-to-wafer assembly with stealth dicing and other processes). A combination of laser dicing and blade dicing is used in Memory and Logic.

- Buyers of the thinning and dicing equipment, like Samsung, GigaDevice Semiconductor, SK Hynix, and Micron, have invested in new fabs and fab equipment between 2017-2018, which the DRAM industry was projected to experience significant two-year growth. However, with the market entering a phase of oversupply earlier than predicted, the price declines occurred starting in the third quarter of 2018.

- With relatively less spending by memory manufacturers, the device manufacturers would only need a certain amount of DRAMs to meet the performance requirements for electronic devices. The companies' capital expenditure trend is expected to remain slow over the forecast period, thus impacting the revenues of the thinning and dicing equipment.

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China to Hold a Major Market Share of the Market

- The growing adoption of smart electronic devices is encouraging manufacturing prospects. Necessary incorporation of electronics in automotive applications is one of the principal drivers driving the growth of the China Dicing Equipment Market.

- The integration of artificial intelligence, IoT, and connected devices across multiple end-use verticals is anticipated to encourage the semiconductor manufacturing equipment market growth in the projection period. China has grown a global manufacturing center with the presence of various manufacturing industries.

- As semiconductor supply chains begin changing due to the US-China trade conflict, India is leveraging the benefit. According to stats from the United Nations Comtrade database, annual IC imports into India in 2018 jumped by 281% to USD 8 billion.

- According to World Semiconductor Trade Statistics (WSTS) and SIA Estimates, the Asia Pacific region, which includes markets like China, has surpassed all other regional markets in sales, as electronic equipment production shifted to the area. It has multiplied in size since then - from USD 39.8 billion in 2001 to over USD 282 billion in 2018.

- With the growth in electronic equipment production across the region, the biggest country market across the Asia Pacific region is China. According to the WSTS and SIA Estimates, China is the sole largest country of APAC region, whereby accounting for 56% of the Asia Pacific market and is capturing 34% of the total global market in 2018.

- According to the SEMI, a notable global association helping the electronics industry's manufacturing supply chain, more than 90% of the factories constructed in the world were located in the Asia Pacific. It is estimated that most of these factories are concentrated in China. With initiatives for Tokyo Olympics 2020 already in motion, the semiconductor manufacturing region is anticipated to open up better possibilities for the dicing equipment shortly.

Competitive Landscape

The Dicing Equipment Market is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with a prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on developing new innovations to increase their recognition and market share and increase their profitability.

- Oct 2019 - Panasonic is teaming up with IBM Japan to improve the semiconductor manufacturing process. The companies collaboratively develop and markets a new high-value-added system to optimize the overall equipment effectiveness (OEE) of customers’ semiconductor manufacturing processes and to realize high-quality manufacturing.

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