Wafer Dicing Services Market is Set to Exceed Valuation of USD 838.9 Million By 2032: Astute Analytica

300mm wafers dominate the wafer dicing market driven by growth in AI, 5G, and automotive electronics. Laser dicing leads market due to superior precision, efficiency, and yield, while North America leads with strong talent pool, infrastructure, and commitment to innovation.

New Delhi, May 20, 2024 (GLOBE NEWSWIRE) — The global wafer dicing services market stood at US$ 578.8 million in 2023. It is expected to reach US$ 838.9 million by 2032, growing at a moderate CAGR of 4.21% from 2024 to 2032.

The wafer dicing services market is poised for significant growth driven by several converging trends. While the memory market experienced a downturn in 2023, a rebound is expected in 2024, pushing up prices and overall market health. This aligns perfectly with the rise of other sectors like automotive semiconductors, particularly ADAS (Advanced Driver-Assistance Systems) which are projected to be a major market force by 2027.

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On the technological front, exciting advancements are fueling demand for ever-more powerful and efficient chips. The rise of Generative AI is driving the need for powerful GPUs in data centers, requiring more complex wafer dicing solutions. Chiplet technology and Co-packaged Optics (CPO) are emerging as innovative approaches to chip design, demanding even greater precision in the dicing process. Additionally, the dominance of MRAM in the next-generation memory market, especially for high-performance computing (HPC) applications, necessitates advancements in wafer dicing techniques to handle these advanced materials.

This surge in demand and growth of the wafer dicing services market coincides with a significant expansion of production capacity. Major players like Intel are quadrupling their advanced chip packaging capacity, reflecting the industry’s shift towards chiplet architecture. Similarly, the capacity of CoWoS, a key packaging technology, is expected to see a major increase by the second half of 2024. Overall, installed wafer fab capacity is projected to exceed 40 million wafers per quarter, with China leading the charge in capacity growth.

Consumer demand further strengthens the case for a thriving market. AI applications are poised to move beyond data centers and into personal devices, creating a new wave of AI-powered smartphones, PCs, and wearables. This, coupled with the projected growth of the Asia-Pacific IC design market and the foundry industry’s increasing demand for advanced processes, paints a picture of a dynamic and expanding market. The anticipated growth in the 2.5D/3D package market further emphasizes the need for high-precision dicing solutions.

Key Findings in Wafer Dicing Services Market

Market Forecast (2032) US$ 838.9 Million
CAGR 4.21%
Largest Region (2023) North America (35%)
By Material Silicon Carbide (37.5%)
By Size 300 nm Wafers (54.3%)
By Dicing Technology Laser Dicing (42%)
Top Trends
  • Increasing Demand for Thinner Wafers and Ultra-Thin Chip Production
  • Rise of AI and Machine Learning in Precision Dicing Processes
  • Integration with Emerging Technologies and Demand for High-Performance Chips
Top Drivers
  • High demand from the consumer electronics sector
  • Need for miniaturization of semiconductor devices
Top Challenges
  • High cost of wafer dicing equipment
  • Technical issues related to wafer dicing process
  • Stringent regulatory standards

Dominance of Silicon Carbide in Wafer dicing services market: Superior Properties, Growing Demand, and Technological Advancements Led to Capture 37.5% Market Share

Silicon carbide (SiC) has emerged as a dominant material in the wafer dicing services market. This dominance is driven by several factors, including its superior material properties and the increasing demand for SiC wafers themselves. SiC boasts significant advantages over traditional silicon. It offers a much higher breakdown electric field strength, a wider band gap, and the ability to handle higher voltages. These properties translate to the creation of faster devices with minimal resistance, ideal for high-temperature power devices.

The market for conductive SiC wafers is experiencing significant growth, fueled by the demand for energy-efficient devices and the booming electric vehicle industry. This trend is expected to continue globally, with SiC wafers gaining widespread adoption due to their superior thermal conductivity, high-temperature resistance, and low power consumption.

Technological advancements in dicing techniques further solidify SiC’s dominance in the global wafer dicing services market. Innovative methods like rolling-slitting have been developed to create ultra-thin diamond dicing blades specifically for SiC chips. These blades offer features that reduce cutting resistance and enable precise, self-sharpening cuts. Additionally, TLS-Dicing, a method that uses thermal stress for wafer separation, proves highly effective for SiC wafers. This technique offers several advantages, including fast separation speeds, smooth edges, a clean process with minimal chipping and microcracks, and no tool wear, ultimately leading to a lower cost of ownership.

300mm Wafers: The Undisputed King of the Wafer Dicing Services Market With More than 54% Market Share

The dominance of 300mm wafers in the global wafer dicing services market is undeniable. Global capacity for these wafers is expected to surge by 13.8% in 2024 alone, reaching a staggering 9.2 million wafers per month (wpm). This expansion is mirrored by massive investments from leading semiconductor companies like TSMC, which is pouring $100 billion over the next three years to expand its 300mm fab capacity. As per Astute Analytica, several key trends are propelling this dominance. The rapid adoption of 5G technology is a major driver, demanding advanced semiconductors primarily manufactured on 300mm wafers. This is reflected in the expected shipment of a staggering 660 million 5G smartphones in 2024 alone. Similarly, the booming automotive electronics market, fueled by the increasing use of ADAS and infotainment systems, heavily relies on 300mm wafer production. This segment is projected to grow at a robust CAGR of 10.4% from 2021 to 2028.

The growth of artificial intelligence (AI) and machine learning applications is another significant factor. These advancements necessitate advanced processors and memory chips, often manufactured on 300mm wafers. The global AI chip market itself is expected to reach a value of $138.2 billion by 2030. The ever-expanding data center and cloud computing landscape further strengthens the case for 300mm wafer dominance. Server processors and memory chips, crucial components in this space, are primarily produced on these wafers, with the data center chip market projected to grow at a CAGR of 14.3% from 2021 to 2026, giving a boost to the wafer dicing services market.

The Internet of Things (IoT) boom is another contributing factor. The proliferation of IoT devices translates to a rising demand for microcontrollers and sensors, many of which are manufactured on 300mm wafers. The global IoT semiconductor market is estimated to reach $580 billion by 2024. Memory chip demand, particularly for DRAM and NAND flash, is another significant driver, pushing the need for 300mm wafer production.

Even foundry capacity utilization rates underscore the dominance of 300mm wafers. Leading foundries like TSMC and Samsung are reporting 100% capacity utilization for their 300mm fabs, signifying the immense demand for these wafers. Governments around the world are further bolstering this growth by offering attractive incentives to attract semiconductor manufacturing, specifically targeting 300mm wafer fabs. The U.S. CHIPS Act, with its $52 billion in subsidies for domestic chip production, serves as a prime example.

The strong demand for 300mm wafers is further reflected in the growth of semiconductor equipment sales, projected to reach $103.5 billion in 2024 globally. This tight supply and high demand environment have even led to price increases. Major wafer supplier GlobalWafers, for instance, raised its prices by 10-20% in 2021.

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Laser Dicing is Revolutionizing Wafer Singulation for Next-Generation Semiconductors, Controls Over 42% Market Share

Laser dicing technology has emerged as the undisputed champion of the global wafer dicing services market, and its dominance is poised to continue for years to come. A key driver of laser dicing’s success is its superior precision. It can achieve kerf widths as narrow as 10-20 microns, compared to the 50-100 microns of mechanical sawing. This translates to a significant benefit for manufacturers: more dies per wafer. Laser dicing systems can also process a staggering number of wafers – up to 8,000 per month – far exceeding the capabilities of mechanical methods. Beyond just efficiency, laser dicing offers substantial improvements in quality.

Techniques like stealth dicing can triple the strength of individual dies compared to conventional blade dicing. This translates to fewer damaged chips and higher overall yields, reaching up to 20% better than what mechanical sawing can achieve. The non-contact nature of the laser also minimizes contamination risks, generating up to 70% less debris compared to blade dicing. This cleaner process is crucial for the production of advanced and sensitive electronics.

The versatility of laser dicing is another testament to its dominance in the wafer dicing services market. These systems can cut wafers as thin as 50 microns, enabling the creation of ultra-thin chips that are in high demand for miniaturized devices. This capability aligns perfectly with the growing market for advanced packaging technologies. The economic benefits of laser dicing are undeniable. Compared to traditional methods, it can reduce the overall cost of ownership by up to 30%. This stems from factors like higher yields, lower consumable costs, and a reduction in dicing-induced stress on the wafer (up to 50% less compared to mechanical sawing). These economic advantages extend to specific materials as well. The laser dicing market for silicon carbide (SiC) wafers, a material crucial for power electronics, is expected to grow at a robust CAGR of 18.3%. Similar growth is anticipated for gallium nitride (GaN) wafers, used in RF and power applications, with a projected CAGR of 22.5%.

Looking ahead, the future of laser dicing is bright. Its ability to cut through multiple layers of materials makes it ideal for the burgeoning field of 3D packaging, with studies showing yield improvements of up to 50% compared to mechanical dicing.

North America Takes Center Stage in the Global Wafer Dicing Arena

North America leads the global wafer dicing services market, fueled by a rich history and strategic investments. Arizona boasts a 16% growth in semiconductor jobs since 2016, the fastest in the US, and a long-standing tradition of innovation dating back to the 1950s. Educational institutions like Arizona State University churn out qualified graduates, creating a strong talent pool (190% engineering enrollment surge since 2010).

Strategic investments like Henrico County’s White Oak Technology Park attract industry giants (Qimonda AG’s 1 million-square-foot facility) and boasts excellent logistics (proximity to major transportation hubs). This park even offers top-tier digital connectivity with the Richmond NAP and DE-CIX Richmond. Wherein, Canada joins the US in dominance. Markham, Ontario, is a tech hub brimming with talent (over 1,500 tech companies) and industry leaders (AMD, Qualcomm) alongside rising stars (Astera Labs).

North America’s allure extends to global suppliers in the wafer dicing services market. TSMC’s presence in Arizona has drawn over $1 billion in investments from Taiwan, solidifying the supply chain. The region is also home to nearly 200 semiconductor establishments, reflecting a diverse ecosystem.

Governments are actively involved. Arizona’s initiative to develop a U.S. chip competitiveness roadmap showcases their commitment. The market for advanced materials like silicon carbide wafers is flourishing in Arizona, with a projected CAGR of 18.3% from 2021 to 2026. Universities like Arizona State further strengthen the region’s appeal with cutting-edge research. Logistically, North America excels. Henrico County’s East Coast location grants access to a massive market (55% of the US population within 750 miles). With a skilled workforce, strategic investments, and a future-oriented vision, North America reigns supreme in wafer dicing services.

Financial Investments and Acquisitions in Wafer dicing services market

  1. In August 2022, Navitas, a US-based semiconductor company, acquired GeneSiC Semiconductor for $100 million, indicating consolidation and investment in the SiC sector.
  2. Mersen announced an investment from the French government for capacity expansion of its SiC wafer project, with a total investment of Euro 85 million planned between 2023 and 2025.

Global Wafer Dicing Services Market Leaders

  • American Precision Dicing Inc.
  • ICT
  • Majelac Technology
  • Syagrus System
  • SVM
  • ADVACAM
  • Advanced International Technology
  • DISCO Corporation
  • Micro Precision Engineering
  • Optim Wafer Services
  • Other Prominent Companies

Key Segmentation:

By Materials

  • Silicon Carbide
  • Alumina
  • Silicon
  • Others (Sapphire, Pyrex Glass, Glass, etc.)

By Size

  • 300 mm
  • 200 mm
  • Others

By Dicing Technology

  • Wafer Scribing & Breaking
  • Mechanical Sawing
  • Laser Dicing
  • Plasma Dicing

By Region

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

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About Astute Analytica

Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.

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