The global market for semiconductor capital equipment was valued at US$ 74.57 billion in 2022 and is projected to reach US$ 152.43 billion by the end of 2033, expanding at a healthy CAGR of 6.8% over the decade.
Semiconductor capital equipment refers to the machinery and equipment used in the manufacturing of semiconductor devices, such as microchips and integrated circuits. These devices are the building blocks of all electronic products. Semiconductor capital equipment includes a wide range of tools and equipment, including photolithography systems, deposition systems, etching systems, and inspection systems, among others. The technology used in the production of semiconductor capital equipment is constantly evolving, and the industry is characterized by rapid innovation and intense competition.
According to Persistence Market Research, worldwide demand for semiconductor capital equipment market is projected to increase at a CAGR of 6.8% from 2023 to 2033. The report forecasts that the value of the market will reach US$ 152.43 billion by the end of 2033.
Semiconductor capital equipment refers to specialized machinery, tools, and systems that are used to manufacture semiconductor devices such as integrated circuits (ICs), microchips, and other related components. This capital equipment is critical for the production of semiconductors as they are used to create and manipulate the tiny structures on the surface of silicon wafers that make up the components of a semiconductor device.
Market Growth Factors:
- Technological Advancements and Innovation: Continuous advancements in semiconductor technology drive the demand for new and more advanced capital equipment. As manufacturers strive to produce smaller, faster, and more energy-efficient chips, they invest in cutting-edge equipment to meet these demands.
- Increasing Demand for Semiconductors: The growing demand for electronic devices, including smartphones, tablets, laptops, and IoT devices, fuels the need for more semiconductor production. This increased demand directly influences the capital equipment market as semiconductor manufacturers invest in new equipment to expand their production capacity.
- Rising Investments in Research and Development: Companies in the semiconductor industry are constantly investing in research and development to stay competitive. This includes developing new materials, processes, and manufacturing techniques, which often require the adoption of advanced capital equipment.
- Industry 4.0 and Smart Manufacturing: The integration of Industry 4.0 concepts, such as automation, artificial intelligence, and the Internet of Things (IoT), into semiconductor manufacturing processes enhances efficiency, reduces downtime, and improves overall productivity. This trend drives the adoption of smart manufacturing technologies and associated capital equipment.
- Transition to Advanced Nodes: The semiconductor industry is continually moving towards smaller process nodes (such as 7nm, 5nm, and below) to improve performance and energy efficiency. Transitioning to these advanced nodes requires significant investments in new capital equipment that can handle the complexities of smaller geometries.
- Global Semiconductor Market Growth: The overall growth and health of the semiconductor market have a direct impact on capital equipment demand. As the semiconductor market expands, manufacturers invest in new equipment to meet the growing demand for chips.
- Emerging Technologies: The emergence of new technologies, such as 5G, artificial intelligence, and electric vehicles, is driving increased semiconductor content in various applications. This, in turn, boosts the demand for semiconductor capital equipment.
- Supply Chain Resilience: Recent disruptions in global supply chains have highlighted the importance of building resilient and robust manufacturing processes. Semiconductor manufacturers are likely to invest in capital equipment that enhances their supply chain resilience and reduces dependencies on specific regions.
- Government Initiatives and Subsidies: Government support in the form of incentives, subsidies, or research grants can stimulate investment in the semiconductor industry, including capital equipment. Governments may recognize the strategic importance of a strong semiconductor sector for economic growth and national security.
- Environmental and Sustainability Concerns: As environmental regulations become more stringent, semiconductor manufacturers are under pressure to adopt cleaner and more sustainable production processes. Investments in new capital equipment may be driven by the need to meet environmental standards and reduce the industrys overall environmental impact.
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- Increased Demand for Advanced Packaging Solutions:
- The demand for advanced packaging technologies, including 3D packaging and heterogeneous integration, continues to grow. Semiconductor capital equipment providers are adapting to support these packaging trends.
- Focus on EUV Lithography:
- Extreme Ultraviolet (EUV) lithography has gained prominence for its ability to achieve smaller feature sizes, essential for advanced semiconductor manufacturing. The adoption of EUV lithography has been a notable trend in the industry.
- Rising Investments in 5G Technology:
- The deployment of 5G networks worldwide is driving increased demand for semiconductors. This, in turn, influences the need for advanced semiconductor capital equipment to manufacture chips that support 5G applications.
- AI and IoT Driving Innovation:
- The growth of artificial intelligence (AI) and the Internet of Things (IoT) is leading to innovations in semiconductor design and manufacturing. Capital equipment that supports the production of AI-specific chips and IoT devices is in demand.
- Industry 4.0 and Smart Manufacturing:
- The integration of Industry 4.0 principles, including automation, data exchange, and IoT, into semiconductor manufacturing processes is a growing trend. This enhances efficiency, reduces costs, and improves overall production capabilities.
- Focus on Sustainability:
- Environmental and sustainability concerns are influencing the semiconductor industry. Manufacturers are increasingly looking for capital equipment that is energy-efficient and complies with environmental standards.
- Shortage and Supply Chain Resilience:
- The semiconductor industry faced a global chip shortage, bringing attention to the need for supply chain resilience. Manufacturers are likely to invest in capital equipment to address vulnerabilities and enhance supply chain robustness.
- Transition to Advanced Nodes:
- The industry continues to transition to smaller process nodes (e.g., 7nm, 5nm, and below) to improve performance and energy efficiency. This ongoing transition influences the demand for capital equipment that can handle the challenges of advanced semiconductor manufacturing.
- Increasing Investments in R&D:
- Companies are investing heavily in research and development to stay competitive. This includes the development of new materials, processes, and technologies, which, in turn, drives the demand for advanced semiconductor capital equipment.
- Global Geopolitical Factors:
- Geopolitical factors, including trade tensions and regional policies, can influence the semiconductor industry. Companies may adjust their strategies and investments in capital equipment based on geopolitical considerations.
- Accelerated Digital Transformation:
- The acceleration of digital transformation across industries is increasing the demand for semiconductors. Capital equipment providers are adapting to support the production of chips for applications such as cloud computing, edge computing, and digital transformation initiatives.
- Collaborations and Partnerships:
- Increased collaborations and partnerships between semiconductor manufacturers, equipment suppliers, and research institutions are observed, fostering innovation and addressing complex challenges in semiconductor manufacturing.
Key Takeaways from Market Study
- The global semiconductor capital equipment is predicted to reach US$ 152.43 billion in value by the end of 2033.
- By industry, consumer electronics occupied a leading market share of 33.5% in 2022.
- By type, wafer-level manufacturing equipment is estimated to account for 46% share of semiconductor capital equipment demand in 2023.
- East Asia held a market share of 28.9% in 2022, followed by North America at 22.5% and Western Europe at 18.6%.
Rising Demand for Automation Necessitating Increased Utilization of Semiconductor Capital Equipment for IC Production
Demand for automation is one of the primary drivers of the semiconductor capital equipment market. The increasing need for automation in various industries, such as electronics, automotive, and aerospace, is driving the demand for semiconductor capital equipment.
This equipment is used in the manufacturing of semiconductor chips, which are essential components in various electronic devices. Demand for automation is driven by the need for increased efficiency, accuracy, and precision in the manufacturing process, as well as the need to reduce labor costs.
Increasing Investments by Governments in New Electronics Manufacturing Facilities Utilizing Advanced Semiconductor Capital Equipment
Semiconductor shortage has prompted companies and governments to invest in the establishment of more semiconductor manufacturing facilities. This includes the construction of fabrication plants and assembly and testing facilities. Setting up these new facilities requires a range of capital equipment, from cleanroom infrastructure to manufacturing tools and equipment. Capital equipment manufacturers can capitalize on this opportunity by supplying the necessary equipment for these new facilities.
New manufacturing facilities may have specific requirements based on their process technologies, product lines, and capacity needs. Capital equipment manufacturers can seize this opportunity by offering customized equipment solutions tailored to the needs of these facilities. By collaborating closely with semiconductor manufacturers and understanding their unique requirements, equipment manufacturers can develop specialized equipment that optimizes production processes and meets specific facility needs
Major industry companies are increasing their manufacturing capacity as a result of the rising demand for electronic products. They are also focusing on making their products more easily available and more reasonably priced to meet the demands of the semiconductor industry.
Here are some additional players: Applied Materials, ASML Holding, Lam Research, Tokyo Electron, KLA Corporation, Nikon, ASM Pacific Technology, Hitachi High-Technologies, SCREEN Holdings, Canon
- In 2021, Applied Materials launched its Endura(R) Copper Barrier Seed IMS system, which enables advanced copper interconnects for the production of high-performance chips.
- In 2022, ASML announced plans to invest EUR2.5 billion in R&D and expand its manufacturing capacity to meet the growing demand for its lithography systems.
More Valuable Insights on Offer
Persistence Market Research’s report on the semiconductor capital equipment industry is segmented into three sections: Type (assembly equipment, automated test equipment, wafer-level manufacturing equipment), industry (consumer electronics, healthcare, automotive, information technology & telecommunication, others), and region (North America, Latin America, East Asia, South Asia & Pacific, Western Europe, Eastern Europe, Central Asia, Russia & Belarus, Balkans & Baltics, and the Middle East and Africa).
Persistence Market Research is a U.S. based full-service market intelligence firm specializing in syndicated research, custom research, and consulting services. Persistence Market Research boasts market research expertise across the Healthcare, Chemicals and Materials, Technology and Media, Energy and Mining, Food and Beverages, Semiconductor and Electronics, Consumer Goods, and Shipping and Transportation industries. The company draws from its multi-disciplinary capabilities and high-pedigree team of analysts to share data that precisely corresponds to clients’ business needs.
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