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.
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.
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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, drive 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).