Chip Manufacturing Equipment (Global Market)

2024: China spends as much on chip equipment as the rest of the world

According to the results of the first quarter of 2024, China spent approximately $12.52 billion on the purchase of equipment for the production of chips. This corresponds to about half (47%) of global spending in the corresponding segment, which amounted to $26.42 billion. Such data are provided in the report of the industry association SEMI, published on June 5, 2024.

It is noted that global revenue from the sale of equipment for the production of chips during January-March 2024 decreased by 2% compared to the same period in 2023, when expenses were estimated at $26.85 billion. At the same time, China increased costs on an annualized basis by 113%: for example, in the first quarter of 2023, about $5.87 billion was spent on the purchase of this equipment in China. Local companies are actively purchasing installations for the production of semiconductor products amid increasing sanctions from the United States.

In second place in the ranking of the largest customers of equipment for the production of chips is South Korea from $5.2 billion in the first quarter of 2024. Costs decreased by 7% compared to the first quarter of 2023, when $5.62 billion was spent. Closes the top three, Taiwan whose expenses decreased year-on-year by 66% - from $6.93 billion to $2.34 billion.

Further in the published list are Europe and North America with approximately the same result - $1.89 billion. A year earlier, costs in these regions were estimated at $1.53 billion and $3.95 billion, respectively. Moreover, in Europe, purchases of equipment for the production of chips rose year-on-year by 23%, while in North America they decreased by 33%. Japan, as noted in the SEMI study, reduced costs by 4% - from $1.9 billion in the first quarter of 2023 to $1.82 billion in the first quarter of 2024.^[1]

2023: Global Chip Prime Equipment Market Size Reaches $25.86 Billion for the Year

In 2023, the global market for lithographic equipment for the production of microchips reached $25.86 billion. The industry is showing steady growth, which is explained, among other things, by the rapid development and introduction of artificial intelligence technologies. This is stated in a study by Fortune Business Insights, the results of which were published in mid-October 2024.

It is noted that a pandemic had a significant impact on the market, COVID-19 due to which the supply chains were disrupted, and many companies suspended their activities. The epidemiological restrictions introduced led to delays in the production of lithographic equipment due to the closure of factories, a reduction in labor force and logistics problems. The pandemic has hit the industry in question in the Asian region especially hard.

One of the key drivers of the sector, the authors of the report call the spread of generative AI, which stimulates innovation and change in various fields. These algorithms optimize the design of complex hardware components such as lenses and mirrors used in photolithography. By modeling millions of variations, AI can help engineers identify the most efficient designs, improving the accuracy and performance of installations. For advanced processes, including deep ultraviolet (EUV) lithography, AI helps improve mask designs and exposure parameters. This increases the efficiency of using EUV lithography in the production of complex semiconductor nodes. The market is also being driven by increasing demand for semiconductor integrated circuits. In particular, there is a growing need for semiconductor chips for segments such as automotive electronics, mobile gadgets and AI systems.

Among the restraining factors are technological limitations and the increasing complexity of lithographic equipment. The trend towards miniaturization in the production of semiconductor products requires the introduction of increasingly advanced technologies. The key players in the global market are:

• ASML Holding;
• Nikon;
• Canon;
• EV Group;
• Veeco Instruments;
• SUSS MicroTec SE;
• Shanghai Micro Electronics Equipment;
• Neutronix Quintel;
• Jeol;
• Onto Innovation.

Geographically, the leader is Europe with costs of $10.88 billion at the end of 2023. ASML is based here - the world's leading supplier of photolithographic equipment, especially in the EUV segment. ASML's dominance has made Europe a critical hub for the development and adoption of advanced lithographic technologies. The region has a well-developed research and development ecosystem with numerous universities, research institutes and private companies. North America is experiencing steady growth thanks to a variety of semiconductor manufacturing facilities that use advanced lithographic equipment. At the same time, the Asia-Pacific region in 2023 showed the fastest growth rates, which is explained by the presence of such large enterprises as TSMC, Samsung and SMIC. In addition, significant investments are being made here in advanced lithography technologies.

At the end of 2024, the global market for lithographic equipment is estimated at $27.66 billion. Fortune Business Insights analysts believe that in the future, the CAGR (CAGR in compound percentage) will be 9%. As a result, by 2032, spending may increase to $55.13 billion.^[2]

2022

Global equipment sales update record of $107.64 billion

On April 12, 2023, the SEMI (Semiconductor Equipment and Materials International) industry association announced the results of a study of the global market for equipment for the production of semiconductor products.

It is reported that at the end of 2022, the costs in the designated segment reached $107.64 billion, which is an absolute record. For comparison: a year earlier, expenses amounted to $102.64 billion. Thus, the growth was at the level of 5%.

For the third year in a row China , it remains the leader in the purchase of equipment for the manufacture of semiconductor products. The costs on the PRC market in 2022 amounted to $28.27 billion against $29.62 billion in 2021. Thus, a decline of 5% was recorded, which is partly due to restrictions due to the pandemic. COVID-19 In second place in the ranking of equipment buyers is Taiwan with a result of $26.82 billion. This is approximately 8% more than in 2021, when expenses amounted to $24.94 billion. Closes the top three Korea with an indicator of about $21.51 billion, which is 14% less than the result for 2021, when costs were estimated at $24.98 billion.

The SEMI list also includes North America with costs of approximately $10.48 billion at the end of 2022. This is 38% more than in the previous year, when expenses amounted to $7.61 billion. Next comes Japan - $8.35 billion against $7.8 billion in 2021 (plus 7%). In Europe, growth was 93% - from $3.25 billion to $6.28 billion. All other regions together, taken in 2022, spent approximately $5.95 billion on equipment for the production of semiconductor products. This is 34% more compared to 2021, when costs were estimated at $4.44 billion.

The record high in semiconductor manufacturing equipment sales in 2022 is driven by the industry's desire to increase the manufacturing capacity needed to support long-term growth and innovation in key end markets, including high-performance computing and automotive, the study said.[3]

Global market growth of 8%

The global semiconductor chip equipment market reached approximately $98 billion in 2022, an increase of 8% over the previous year. This is stated in the report of the industry association SEMI, presented on March 21, 2023.

The pace of expansion of the industry has sharply decreased compared to 2021, when an increase in supplies by 43% in monetary terms was recorded. In 2020, as noted, the growth was also higher - approximately 15%. The observed trend is associated with weakening demand for semiconductor products in the current macroeconomic situation. In addition, the accumulation of stocks of consumer equipment, mobile devices and other electronics is recorded.

The pace of expansion of the industry has sharply decreased compared to 2021

Taiwan, South Korea, China and North America are named the largest regions in terms of costs for production equipment for the production of microchips. At the same time, the development of the market in China is difficult due to tough American sanctions prohibiting the use of foreign technologies.

Despite the crisis, as SEMI notes, there are several stimulating factors contributing to the increase in demand for semiconductor products on a global scale. This is a growing need for chips for automotive systems, high performance computing (HPC) platforms, and other advanced solutions.

As noted by the Semiconductor Industry Association (SIA), if you distract from short-term fluctuations in demand and consider the long-term trend, the semiconductor industry as a whole has been showing steady growth for more than 20 years. In 2022, total costs reached $573.5 billion. For comparison: in 2021, the volume of the industry was estimated at $139 billion. Over the same period, sales of semiconductor products increased by 290%, reflecting the increased demand for chips in all segments of the global economy.^[4]

2021: Chip Manufacturing Equipment Market Soars 44% in a Year

In 2021, chip manufacturers spent a total of $102.6 billion on equipment for their factories, which is 44% more than a year earlier, when sales of such equipment were measured at $71.2 billion. This is stated in a study prepared by the industry organization Semiconductor Equipment and Materials International (SEMI), which unites manufacturers of semiconductor products, related equipment and materials.

SEMI President and CEO Ajit Manocha, commenting on the recorded figures, noted that the 44 percent growth in the chip manufacturing equipment market indicates the desire of the global semiconductor industry to increase capacity. Moreover, this activity is associated not only with problems in the supply of chips, but also with the continuing development of a wide range of high-tech solutions that will make the digital world smarter and endow it with countless social advantages, the expert added.

In 2021, chip manufacturers spent a total of $102.6 billion on equipment for their factories, which is 44% more than a year earlier.

Global sales of wafer processing equipment increased 44% in 2021, according to SEMI research. Chip assembly and packaging hardware segments showed growth of 87%, and semiconductor testing equipment sales increased by 30%.

China in 2021 retained its leadership in spending on equipment for the production of chips. The volume of this market in the Celestial Empire soared by 58% (the highest rise among all regions) and reached $29.62 billion at the end of 2021. Spending on semiconductor equipment in South Korea increased by 55% to $24.98 billion.

Taiwan entered the top three countries in terms of consumption of equipment for the manufacture of chips in 2021 - there the cost of relevant products rose by 45% and amounted to $24.94 billion. Thus, South Korea and Taiwan showed almost the same results in purchasing equipment for the production of chips.

Japan is in fourth position in this ranking, which in 2021 accounted for $7.8 billion in sales of equipment used in the production of chips. The Japanese market rose 3%, the smallest dynamic of any region reviewed by SEMI. In North America, equipment costs in 2021 increased by 17% compared to 2020 - to $7.61 billion. In Europe, there was a 23 percent increase with the volume of equipment sales of $3.25 billion at the end of 2021. In other countries, combined sales of equipment for the production of chips in 2021 increased by 79% and reached $4.44 billion.

The semiconductor equipment market has experienced a period of unprecedented growth, with six of the past seven years of rising costs amid chipmakers expanding capacity to meet ongoing demand for a wide range of new technologies, including artificial intelligence, self-driving cars and quantum computing, says Ajit Manocha. - The increase in production now goes beyond the sustainable demand for electronics for remote work and training, telemedicine and other projects that began during the COVID-19 pandemic.

Chip manufacturing

Amid a global shortage of chips, their manufacturers are actively expanding capacity, but the implementation of these plans may be hampered by a shortage of key equipment for the manufacture of semiconductor products. The problem is likely to continue for another couple of years, Peter Wennink, CEO of ASML, one of the leaders in the production of lithographic devices for the production of microcircuits, said in March 2022.^[5]

2020: Global Equipment Market Growth by 16.4%, to $64.9 Billion

The volume of the global market for equipment used for the production of chips at the end of 2020 reached $64.9 billion, an increase of 16.4% compared to 2019. Such data in August 2021 were published in the research company Gartner.

According to analysts, the leading five in 2020 accounted for 71.6% of the market in question. The first place was shared by two companies - the American Applied Materials and the Dutch ASML, which have 18.6% and 18.1% of sales of equipment for the production of semiconductor products, respectively. Applied Materials' share was unchanged for the year, while ASML's increased by 0.1 percentage points.

The top 3 vendors were closed by the American Lam Research, which took 15% of the market at the end of 2020, which is 1.2 percentage points more than a year earlier. Tokyo Electron (13.4%) and KLA (6.5%) followed.

The volume of the global market for equipment used for the production of chips reached $64.9 billion in 2020

According to the industry organization Semiconductor Equipment and Materials International (SEMI), which unites manufacturers of semiconductor products, related equipment and materials, in 2020, chip manufacturing equipment was sold worldwide in the amount of $71.2 billion, which is 19% more than a year ago in $59.8 billion.

For the first time in SEMI's entire surveillance of the market, China has become the largest region for the sale of chip equipment. In the Celestial Empire, the cost of such equipment in 2020 increased by 39%, $18.72 billion. Sales in Taiwan, the second-largest market, were flat - around $17.15 billion - after strong growth in 2019.

South Korea registered an increase of 61% to $16.08 billion, which allowed it to maintain third place. Annual spending also increased by 21% in Japan and 16% in Europe, both regions recovering from a downturn in 2019. Semiconductor equipment sales in North America declined 20% in 2020 after three years of sequential growth.

Leading countries in spending on chip manufacturing equipment at the end of 2020

China, Taiwan and South Korea are projected by SEMI to lead in spending on chip manufacturing equipment. Large investments in contract manufacturing and memory development are expected to help China reach first place in the market for the first time. However, in 2021 and 2022, South Korea is likely to lead the way with growing investment in logic chips and memory segment recovery.

Semiconductor equipment costs in Taiwan will remain stable thanks to investments in advanced contract chip manufacturing. Most other regions will also see growth in the coming years, the study said.

Global wafer processing equipment sales rose 19% in 2020, while costs for wafer processing devices (front end). up 4%. The assembly and packaging segment saw significant growth in all regions, leading to a 34% market increase in 2020, while overall test equipment sales increased by 20%.

The researchers also note a surge in demand for equipment used in the production of RAM and flash memory, which is largely facilitated by strong sales for such products. It is expected that by the end of 2021, global costs for devices intended for serial production of DRAM memory will increase by 46% compared to 2020 and reach $14 billion. In the NAND flash memory segment, 13 percent growth is expected in 2021 (up to $17.4 billion) and a 9 percent rise in 2022 (up to $18.9 billion).^[6]

2019

Market drop 7% to $59.8 billion

The volume of the global market for equipment intended for the production of semiconductor components in 2019 amounted to $59.8 billion, down 7% compared to 2018, when sales were record and measured at $64.5 billion. This is evidenced by the data of the SEMI association, which represents the interests of developers and chip manufacturers.

The largest costs for chip manufacturing equipment in 2019 fell on Taiwan - $17.12 billion, which is 68% higher than a year ago. In second place is China with orders of $13.45 billion and 3 percent growth.

The market for equipment for the production of chips in 2019 sank by 7%

South Korea, which ranked first in semiconductor factory equipment costs in 2019, slipped to third position a year later due to a 44% reduction in investment, to $9.97 billion.

Chip manufacturers in North America at the end of 2019 purchased equipment worth $8.15 billion, which is 40% more than a year earlier. In Japan, the cost of such equipment decreased by 34% and amounted to $6.27 billion. In Europe, the decline was the strongest among all regions (-46%, up to $2.27 billion).

In other countries, combined purchases of equipment for the production of chips in 2019 decreased by 38% compared to 2018 - to $2.52 billion.

Global sales of wafer processing equipment fell 6% in 2019, while sales in other segments of pre-processing equipment rose 9%, according to SEMI analysts. 

Equipment for assembling and packaging chips, as well as devices for testing products in 2019, showed a decrease in sales by 27% and 11%, respectively. In China, all segments of the market in question have shown an upswing other than chip assembly and packaging solutions.

Change of leader for the first time in 30 years

At the end of November 2019, the analytical company The Information Network published the results of a study called The Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts, in which experts reflected the situation in the market for equipment for the production of semiconductor solutions.

According to preliminary analysts, in 2019, for the first time in almost 30 years, the leader will change in the market: it will be ASML, which will be ahead of Applied Materials. The shares of manufacturers will be 21.6% against 19.4%, respectively.

The Information Network published the results of a study called The Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts, in which experts reflected the situation in the market for equipment for the production of semiconductor solutions

In 2018, Applied Materials accounted for 19.2% of the chip manufacturing equipment market, while ASML had about 18%.

According to Robert Castellano, CEO of The Information Network, Applied Materials' market share has been falling for three years. In 2015, it was measured at 23%.

In 2020, ASML is likely to strengthen market leadership and occupy it by 22.8%, and Applied Materials will remain in second place with 19.3%, Castelano expects.

The analyst cites this forecast, based on the expected capital expenditures of semiconductor manufacturers and the fact that in 2020 sales of equipment for the production of chips will rise by only 5%.

In addition to Applied Materials and ASML, the major players in the semiconductor manufacturing equipment market are Tokyo Electron and Lam Research, which will account for 14.8% and 14.2% of sales of this equipment in 2019, respectively. Compared to 2018, the shares of these companies will decrease. They will be followed by KLA, which, on the contrary, should increase the market share - from 6.2% to 6.9%, the study says.

According to experts, the volume of the global chip market in 2019 will fall by 13%.^[7]

Notes