Semiconductor Manufacturing Equipment Market to Hit Valuation of USD 203.2 Billion By 2032 | Astute Analytica

The global semiconductor manufacturing equipment market is fueled by $500 billion in new investments, significant automation advancements, and rising demand from sectors such as AI, IoT, and 5G technology. India and US to remain a center of Attraction.

New Delhi, May 27, 2024 (GLOBE NEWSWIRE) — The global semiconductor manufacturing equipment market size is to grow from US$ 84.2 billion in 2023 to US$ 203.2 billion by 2032, at a CAGR of 10.28% during the forecast period 2024–2032.

As per Astute Analytica’s latest report, the global semiconductor industry is projected to invest over $500 billion in new factory constructions by the end of 2024, reflecting the increasing strategic importance of semiconductors across various industries. This surge includes a record high of 33 new semiconductor manufacturing facilities starting construction in 2023 alone, with China leading the charge with 20 new facilities focused on mature technologies. The European Chips Act is also propelling investments in Europe, with 17 new fabs expected to start construction between 2021 and 2023.

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In the United States semiconductor manufacturing equipment market, the CHIPS and Science Act allocates over $50 billion for direct funding, federal loans, and loan guarantees to expand American semiconductor research and manufacturing. This initiative aims to reduce dependence on foreign suppliers and bolster domestic production capabilities. Samsung’s $17 billion factory in Texas, set to be operational by 2024, is a notable example of such investments.

Technological Advancements and Capabilities

Automation and advanced manufacturing technologies are at the forefront of the semiconductor industry’s evolution. Companies like ASML and Applied Materials are investing over $2 billion annually in research and development to enhance automated manufacturing solutions. Automation has increased productivity by 30-40% in semiconductor fabs, reduced manufacturing costs by up to 20%, and improved defect detection rates by 50%.

The integration of robotics in semiconductor manufacturing equipment market has grown by 25% annually, significantly enhancing precision in wafer handling and assembly. Automated fabs now require 40% fewer human operators, allowing for more efficient use of skilled labor and reducing production cycle times by 20%. These advancements are crucial in meeting the growing demand for semiconductors driven by technologies such as AI, IoT, and 5G networks.

Expanding Application of Semiconductors and Growing Investments to Add Fuel to Market Growth

The global semiconductor market, valued at approximately $600 billion, is expected to reach $1 trillion by 2030. The compound semiconductors market, now valued at $40 billion, is driving demand for specialized manufacturing equipment due to its applications in high-frequency electronics. Today, semiconductors are increasingly used in renewable energy applications, with a 25% increase in demand correlating with the growth of the electric vehicle market. This trend is pushing the semiconductor manufacturing equipment market to develop more energy-efficient and environmentally friendly production processes.

The UK’s focus on specialized semiconductor sectors, attracting over $500 million in investment, emphasizes the need for advanced manufacturing equipment tailored to R&D and design. The automotive chip shortage, which resulted in a 3% reduction in global car production, has highlighted the critical nature of semiconductor manufacturing equipment in maintaining stable supply chains. Moreover, investments in neuromorphic computing have increased by 50%, indicating a burgeoning market for semiconductor manufacturing equipment that can produce these innovative chips. Memory chip prices have surged by 20% due to increased demand, impacting the equipment market as manufacturers ramp up production capabilities.

Data center power supply infrastructure investments have grown by 35% to prevent future bottlenecks, which will likely increase the demand for semiconductor manufacturing equipment designed for high-power applications. The proposed US tariffs on Chinese semiconductors could lead to a 5% increase in chip prices globally, affecting the equipment market as manufacturers adjust to cost fluctuations.

Key Findings in Semiconductor Manufacturing Equipment Market

Market Forecast (2032) US$ 203.2 Billion
CAGR 10.28%
Largest Region (2023) Asia Pacific (79.9%)
By Type Front End Equipment (74.5%)
By Application Automation (68.9%)
Top Trends
  • Shift towards smaller nodes, such as 10nm, 7nm, and 5nm
  • AI and automation are revolutionizing semiconductor manufacturing by speeding up processes, increasing chip performance, reducing production costs, and enhancing output
  • Global rollout of 5G technology is significantly impacting the semiconductor industry
Top Drivers
  • Global semiconductor industry is projected to invest over $500 billion in new factory constructions by 2024
Top Challenges
  • Geopolitical tensions, trade disputes, and the COVID-19 pandemic have caused significant supply chain disruptions
  • Semiconductor industry faces a widening gap between the demand for skilled professionals and the availability of qualified individuals
  • Transition to smaller nodes and advanced manufacturing processes involves significant costs and resources

India is Offering Lucrative Opportunity for Semiconductor Manufacturing Equipment Market: $15.2 Billion to Be Invested for Semiconductor Manufacturing

India’s ascent in the global semiconductor market is marked by robust investments and supportive government initiatives. The semiconductor industry in India is witnessing a significant upswing, thanks to the substantial backing of the $10 billion India Semicon Mission Program and the greenlighting of four major projects by the Government of India. This momentum is further amplified by the Design Linked Incentive (DLI) Scheme, which falls under the ambit of the National Policy on Electronics 2019, aiming to fortify semiconductor design expertise and diminish the dependency on imports. The country’s stable political climate and strategic geographical positioning enhance its appeal as a prime destination for international semiconductor investments.

The Indian government’s commitment to the semiconductor sector is evident in the approval of hefty investments for the establishment of new semiconductor plants. With a collective investment of $15.2 billion, three semiconductor plants have been authorized, targeting an annual production of 3 billion chips for a variety of semiconductor manufacturing equipment market needs. In Assam, Tata Semiconductor Assembly and Test is set to invest $3.2 billion in a semiconductor assembly, testing, marking, and packaging unit. Additionally, specialized chip facilities are on the horizon, boasting a production capacity of 15 million chips per day. These industrial expansions are projected to generate 20,000 direct and around 60,000 indirect employment opportunities.

Tata Electronics Private Limited (TEPL) has joined forces with Powerchip Semiconductor Manufacturing Corp (PSMC) to set up a semiconductor fab in Dholera, Gujarat, backed by an investment of INR 9100 billion. Furthermore, Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) is poised to establish a semiconductor unit in Morigaon, Assam, with an investment of INR 2700 million. Another semiconductor ATMP unit dedicated to specialized chips is slated for Sanand, Gujarat, with an investment of INR 760 million.

The Indian government has ramped up its support for the semiconductor and display manufacturing sectors with a 130% increase in allocation, amounting to INR 690.3 million, giving a boost to the semiconductor manufacturing equipment market. The DLI scheme has attracted 26 applications, with 5 already approved, positioning India on a fast track to becoming a prominent semiconductor chip manufacturer. By 2026, the semiconductor industry in India is expected to create over 300,000 job opportunities, marking a significant milestone in the country’s technological and economic advancement.

Front-End Equipment Leads the Global Semiconductor Manufacturing Equipment Market, Contribute over 74.5% Market Share

The semiconductor manufacturing process involves a complex series of steps, with front-end equipment playing a crucial role in the initial fabrication stages. Among the various front-end equipment, several types hold the highest contribution to the market due to their essential functions and technological advancements. Lithography equipment, particularly steppers, holds the highest share of the market. Lithography is a critical process in semiconductor manufacturing, as it is used to transfer the circuit pattern from a photomask to the photoresist on the wafer surface. Advances in lithography, along with deposition and etch processes, enable the pursuit of Moore’s Law and the shrinking of semiconductor devices.

Chemical Vapor Deposition (CVD) and Chemical Mechanical Planarization (CMP) are also significant contributors to the front-end equipment segment of the semiconductor manufacturing equipment market. CVD is used to deposit thin layers of materials, such as metals, oxides, and nitrides, onto the wafer to create electronic components. It is a versatile process used in various applications, from coating tinted glasses to semiconductor fabrication. CMP, on the other hand, is the most popular technique for removing surface irregularities on silicon wafers, and it has become the process of choice for interlayer dielectric (ILD) planarization.

Other essential front-end equipment includes wafer handling and transport systems, chamber open/close mechanisms, and surface preparation tools. These machines are crucial for maintaining the efficiency and precision of the manufacturing process. For example, wafer handling and transport systems ensure the safe and accurate movement of wafers between different process steps, while surface preparation tools, such as those for photoresist removal and cleaning, are vital for maintaining the integrity of the wafer surface.

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Automation With Over 68.9% Market Share Leading the Semiconductor Manufacturing Equipment Market

Automation is becoming a cornerstone in the market due to its profound impact on efficiency and precision. The global semiconductor manufacturing equipment market is projected to grow from US$ 84.2 billion in 2023 to US$ 203.2 billion by 2032, at a CAGR of 10.28%. This growth is significantly driven by automation technologies, which have revolutionized the industry by enhancing productivity, improving quality control, and reducing production costs.

Automation has increased productivity by 30-40% in semiconductor fabs, reducing manual intervention and errors. Automated systems can reduce manufacturing costs by up to 20%, primarily through decreased labor costs and improved yield rates. Additionally, automated inspection systems have improved defect detection rates by 50%, ensuring higher quality semiconductor products. Over 68% of semiconductor manufacturing equipment deployed in 2022 incorporated some form of automation.

Investment in research and development in the semiconductor manufacturing equipment market is also a key driver of automation in this sector. Companies like ASML and Applied Materials invest over $2 billion annually in developing automated manufacturing solutions. The use of robotics in semiconductor manufacturing has grown by 25% annually, enhancing precision in wafer handling and assembly. Automation has reduced semiconductor production cycle times by 20%, accelerating time-to-market.

Automated fabs require 40% fewer human operators, allowing for more efficient use of skilled labor. Moreover, automation helps reduce waste by 15%, contributing to more sustainable manufacturing practices. These statistics underscore the pivotal role of automation in driving growth, efficiency, and quality in the semiconductor manufacturing equipment market. The dominance of automation is clear, as it continues to shape the future of semiconductor manufacturing by addressing industry challenges and optimizing operations.

Global Semiconductor Manufacturing Equipment Market Key Players

  • Tokyo Electron Limited
  • Lam Research Corporation
  • Asml Holdings N.V.
  • KLA-Tencor Corporation
  • Screen Holdings Co., Ltd.
  • Applied Materials Inc.
  • Teradyne Inc.
  • Hitachi High-Technologies Corporation
  • Plasma-Therm
  • Rudolph Technologies, Inc
  • Advantest Corporation
  • Startup Ecosystem
  • Other Prominent Players

Key Segmentation:

By Type

  • Front-end Equipment
  • Backend Equipment

By Application

  • Automation
  • Chemical Control Equipment
  • Gas Control Equipment
  • Others

By Region

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa (MEA)
  • South America

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About Astute Analytica

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