Semiconductor Manufacturing Equipment Market size worth over $80bn by 2026
Published Date: August 25, 2020 Authors: Preeti Wadhwani, Shubhangi Yadav
Semiconductor Manufacturing Equipment Market size is set to surpass USD 80 billion by 2026, according to a new research report by Global Market Insights, Inc.
The rising trend toward militarization of chip size and innovative architecture for advanced and compact electronic devices has propelled the growth opportunities for companies operating in the semiconductor manufacturing equipment market. The increasing demand for smartphones and wearable electronics will increase the demand for compact chips size among OEMs. Moreover, the market leaders are continuously involved in the development of new fabrication facilities with new process technology. In April 2020, Samsung Electronics announced the development of its new 3nm chip manufacturing facility by 2022 to improve the overall efficiency of high-end consumer devices.
The proliferation of 5G and IoT devices among consumers to operate fast and multi-functional activities has accelerated opportunity for advanced packaging technology in semiconductor manufacturing. To increase their production capabilities and stabilize product quality, the companies are inclined toward the integration of value-added system with manufacturing equipment. In October 2019, Panasonic Corporation announced its collaboration with IBM to optimize the effectiveness of semiconductor manufacturing process and enable high-quality manufacturing.
The complexity in chip pattern is one of the major factors restraining the semiconductor manufacturing equipment market expansion. The rising interest toward advanced technologies, such as AI and 5G, has increased the demand for compact size and high-density chipsets, which resulted in decline of lithography wavelength. Furthermore, the shrinking node size will also increase the complexity of wafer and photomasks, which will consequently increase the requirement of new semiconductor manufacturing equipment. Additionally, some of the technical challenges faced during semiconductor manufacturing are electrostatic charges, which may decline the product quality.
Surging demand for contract packaging in healthcare will drive the assembly and packaging equipment segment demand
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The back-end equipment is projected to witness around 6% growth rate through 2026. Assembly and packaging equipment sub-segment accounted for over 10% semiconductor manufacturing equipment market share in 2019 due to the increasing adoption of contract packaging from healthcare equipment manufacturers, which aids to improve their production, performance, and streamline operation. In addition, the development of stringent regulations, such as Drug Quality and Security Act and Affordable Care Act, has propelled the growth opportunity for assembly and packaging equipment.
According to Healthcare Compliance Packaging Council (HCPC), the market for contract packaging in healthcare and pharma is increasing with a rate of 5% to 8% every year. This will fuel the adoption of assembly and packaging equipment among fab operators and assembly lab providers in the healthcare sector. In February 2020, Palomar announced to expand its manufacturing and contract assembly lab to its new headquarters in California to increase its client base for new markets including medical, 5G, industrial, telecom, among others.
Browse key industry insights spread across 150 pages with 160 market data tables and 22 figures & charts from the report, “Semiconductor Manufacturing Equipment Market Size, By Product (Front-end Equipment [Lithography, Polishing & Grinding, Water Surface Conditioning Equipment], Back-end Equipment [Wafer Manufacturing Equipment, Assembly & Packaging Equipment, Test Equipment]), By Dimension (2D, 2.5D, 3D), By Supply Chain Process(Outsourced Semiconductor Assembly and Test (OSAT), Integrated Device Manufacturer (IDM), Foundry), Industry Analysis Report, Regional Outlook, Application Potential, Competitive Market Share & Forecast, 2020 – 2026” in detail along with the table of contents:
Rising investment to integrate 3D technology is laying a significant impact on the semiconductor manufacturing equipment market
3D technology segment held more than 30% revenue share in 2019 and is predicted to expand at a CAGR of 8% till 2026owing to the rising adoption of HPC (high performance computing) chipsets and data centers and other cloud computing infrastructures. The 3D technology aids to deliver high bandwidth density and energy efficiency with low latency in various multicore architectures.
Rising integration of automation by OSAT will further boost the market revenue
The Outsourced Semiconductor Assembly and Test (OSAT) segment is showcasing high growth in the semiconductor manufacturing equipment market. The OSAT companies are more inclined to adopt automation in their wafer level packaging. In January 2020, A*STAR’s Institute of Microelectronics (IME) announced the development of fan-out wafer level packaging (FOWLP) for next-generation IoT technology, which will help to serve a wide range of sectors including healthcare, consumer electronics, and automotive. Moreover, the OSAT companies are also emphasizing on the integration of 2.5D and 3D wafer architecture to deliver high functionality and long battery life in various compact and handheld consumer devices.
Favorable government policies to enhance the semiconductor industry are making a significant impact on the European market
Europe semiconductor manufacturing equipment market will observe substantial growth from 2020 to 2026 led by rising investments from the government to boost the semiconductor-based project in the region. For instance, the European Commission has organized a strategy to offer USD 10 billion for private and public funding and achieve 20% share of the global semiconductor market by 2020.
The collaboration of European chips makers with various industry leaders will further enhance the development of the fabrication process. In April 2020, STMicroelectronics, a European chipmaker announced its partnership with Huawei, a Chinese networking and telecommunication giant for the design and development of fabricated chips used in automotive and mobile industries.
Major companies operating in the semiconductor manufacturing equipment market include Applied Materials, Inc., LAM RESEARCH CORPORATION, Tokyo Electron Limited, ASML, KLA-Tencor, Dainippon Screen Mfg. Co., Ltd, among others. Market players are involved in several strategic initiatives, such as merger, acquisition, and collaboration, to increase their semiconductor manufacturing equipment adoption in various industries. For example, in July 2019, Applied Materials, Inc. announced to acquire the remaining share of Kokusai Electric Corporation for USD 2.2 billion. This new business strategy will help the company to enhance its productivity and services for foundry, logic, and memory customers and further enhance its single wafer processing system.