The semiconductor equipment market comprises various tools and systems required for the manufacturing of integrated circuits, semiconductors, and other components in the electronics industry. Semiconductor equipment helps in a variety of production processes ranging from crystal growth, wafer production, wafer examination, chemical mechanical planarization, photolithography, etching, deposition, and electronic monitoring and controlling tools. The market has witnessed significant growth with rapid advancements in nanotechnology and continuous miniaturization of semiconductor devices. Growing demand for electronic devices and emergence of powerful technologies such as 5G, artificial intelligence, and quantum computing is driving substantial investments in semiconductor facilities globally.
The Global Semiconductor Equipment Market is estimated to be valued at US$ 95.97 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the Semiconductor Equipment Market are Northrop Grumman Corporation, BAE Systems, Lockheed Martin Corporation, Clearpath Robotics Inc., John Bean Technologies Corporation, ECA Group, Israel Aerospace Industries Ltd., Endeavor (Now a part of FLIR system), Harris Corporation, and General Dynamics. Continuous technology upgrades and heavy investments in R&D by these players ensure availability of most advanced and efficient production solutions.
The rising Semiconductor Equipment Market Demand for consumer electronics and shift towards electric vehicles is significantly driving the demand for semiconductors. Growing interconnectivity through advancements in 5G and IoT is further fueling semiconductor consumption. This substantial increase in demand is prompting foundries and semiconductor manufacturers to ramp up their production capabilities through investments in new fabs and equipment upgrades.
Globally, the biggest investments are currently underway in regions with high electronics consumption such as Asia Pacific, North America, and Europe. Countries like South Korea, Taiwan, China, and the United States are at the forefront of these mega facility developments. Meanwhile, lack of domestic semiconductor manufacturing is motivating other regions to enter the market with incentives for fab constructions. This global capacity expansion will require massive semiconductor equipment procurement over the coming years.
Market Key Trends
One of the Semiconductor Equipment Market gaining momentum in the semiconductor equipment market is the increasing automation and implementation of Industry 4.0 principles. Traditional manual wafer manufacturing is gradually transitioning towards automation with deployment of robotics, machine learning, artificial intelligence, predictive maintenance, and smart sensors. Automation helps improve production efficiency, throughput, safety, and process control. It allows real-time transparency, traceability, and quick fault detection. Overall, automation helps optimize costs and boost competitiveness for foundries and IDMs amid rising complexity of technology nodes. This trend is expected to significantly influence long term investments towards upgrading existing infrastructure as well as new fab developments.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the semiconductor equipment industry requires huge capital investments and R&D spending for technological advancements.
Bargaining power of buyers: The bargaining power of buyers is high due to the fragmented nature of the industry with few large buyers capable of negotiating better terms from suppliers.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as the industry depends on key components from a few specialized suppliers but such components are available from multiple sources with minimal differentiation.
Threat of new substitutes: The threat of new substitutes is low as semiconductor equipment have limited alternatives that can provide the level of precision, speed, and throughput required.
Competitive rivalry: Competitive rivalry is intense among the global players due to rapid technological advancements, pricing pressures, and innovation requirements.
The geographical region where the maximum value of the semiconductor equipment market is concentrated is Asia Pacific due to high manufacturing activities of semiconductor chips, ICs, and electronics devices in countries like China, Japan, South Korea, Taiwan. The fastest growing region for the semiconductor equipment market during the forecast period is expected to be Southeast Asia due to the shifting of semiconductor fabs to low-cost countries like Indonesia, Vietnam, and Malaysia by prominent players to capitalize on inexpensive labor and lower transportation costs.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.
About Author - Money Singh
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. LinkedIn Profile