Lithography Equipment Market size is projected to witness appreciable growth from 2021 to 2027, owing to the high awareness about the viability of the photolithography process worldwide. This process has emerged as a prime candidate for overcoming the limitations of inkjet printing and fine metal mask. These drawbacks include their non-compatibility with the high resolution and pixel density requirements of next-gen OLED displays. Likewise, the increasing penetration of the UV-LED technology for use in applications that need rigorous quality checks such as lithography will further stimulate the product demand in the coming years.
Lithography equipment refers to a system that transfers circuit or device patterns to a substrate through the usage of the patterned mask as well as a light beam or electrons to expose a photoresist layer. This equipment includes a range of techniques including photolithography, which adopts a template or mask, and nanolithography, which employs electron-beam imaging to create a pattern.
Mounting semiconductor demand, even during the COVID-19 pandemic, is a major trend bolstering the market share, as lithography is the heart of the semiconductor fabrication process. In 2020, the semiconductor industry recorded revenue growth of 6.5% to reach the $440 billion mark. Although chipmakers have been deploying optical-based lithography machines to pattern various features on chips for years, major entities like TSMC and Samsung are gradually shifting to EUV lithography to simplify the process. Increasing usage of lithography imaging techniques in the rapidly expanding electronic devices sector will also foster the industry trends in years to come.
With regards to the application spectrum, the advanced packaging segment is set to exhibit a high growth rate through 2027. This is attributable to the accelerating production of advanced packages by chip designers, to enable new system-level designs for various applications in the semiconductor sector. For example, in 2021, Canon launched the FPA-5520iV LF Option in Japan, for the back-end process semiconductor lithography equipment. The Option, equipped with enhanced features, including a 52 mm x 68 mm exposure field and an i-line stepper with a 1.5 µm resolution, is designed for advanced packaging.
Regionally, North America is poised to emerge as a lucrative revenue prospect for the lithography equipment market over the forecast period. This is a result of the rising implementation of policies to strengthen domestic chip manufacturing and promote investments to meet its ever-increasing demand in the U.S. However, a decline in the production of semiconductors for automotive applications, due to the substantial swing in demand amid the pandemic may impede the regional growth to some extent over the coming years.
Key market players include Veeco Instruments Inc., SCREEN Semiconductor Solutions Co., Ltd. (Dainippon Screen), Canon Inc., SUSS MicroTec SE, Nikon Corporation, Orbotech (KLA Corporation), USHIO America, EV Group, ASML Holding, and ORC Manufacturing Co., Ltd., among others. Strategic mergers and acquisitions, and innovative product launches are being employed by these companies to expand their business and sustain a strong position across the global market.
For instance, ASML Holding announced the extension of a chip manufacturing equipment purchase deal with Semiconductor Manufacturing International in March 2021, which is related to an older technology known as DUV (deep ultraviolet lithography). In October 2020, Canon unveiled the FPA-3030i5a, its newest entry in the semiconductor lithography system lineup, in Japan, with an objective to support the manufacturing of devices like compound semiconductors and lower cost of ownership.
The ongoing coronavirus pandemic has affected every facet of life, posing critical challenges to healthcare systems and industrial sectors owing to the closure of manufacturing facilities to limit the virus spread. Over the past months, a considerable increase in the price of LED devices has been observed, due to the supply shortage of electronic components. This price hike is subsequently likely to affect adoption of point-of-use solutions designed to maximize lithography process efficiencies, thereby creating challenges for the industry.
However, rapid expansion of the advanced packaging market attributed to the thriving semiconductor sector, even during the pandemic will assert a positive influence on the industry outlook. As per reliable estimates, the Wafer level packaging surpassed the $3 billion threshold in 2019 and is set to reach up to $6 billion by 2025, which could aid market recovery in the years ahead.