LONDON--(BUSINESS WIRE)--The global semiconductor etch equipment market is expected to grow at a CAGR of close to 4% during the period 2018-2022, according to a new market research study by Technavio.
The report categorizes the global semiconductor etch equipment market by end-user (foundries, memory manufacturers, and IDMs) and by type (high-density etch equipment and low-density etch equipment). The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.
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Market driver: increase in capital spending
The global semiconductor industry, especially after the cyclical period in 2016, is expected to witness a rise in capital spending. The increase in capital spending is because foundries and memory manufacturers are planning to invest in new equipment that is in line with the latest technological developments in the industry. Some of the major factors leading to the increase in capital spending can be attributed to the decreasing linewidths on a chip, use of new materials, introduction of new complex structures, increasing chip design costs, need for integrated manufacturing processes, and identification of new applications.
According to a senior lead analyst at Technavio for semiconductor equipment research, “Foundries are allocating billions of dollars for various projects, which is expected to lead to significant growth of the semiconductor equipment market, which, in turn, will drive the sales of semiconductor etch equipment.”
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Market trend: increase in wafer size
Due to rapid technological advances and transitions, such as the miniaturization of nodes and increase in wafer size, the semiconductor industry is continuously evolving. Equipment manufacturers have to develop new technologies that are in line with the changes in semiconductor IC architecture to sustain in the market due to which the R&D costs incurred is high.
The semiconductor industry has witnessed an increase in the size of silicon wafers from 100 mm wafers to 300 mm wafers. The cost of manufacturing semiconductor ICs is reduced by 20%-25% when shifted to larger diameter wafers. Currently, the semiconductor industry is primarily using 300 mm wafers for IC production. The 300-mm wafer size is expected to be the primary technology that will be utilized as the companies are investing billions of dollars to upgrade and construct new fabs. However, the market demand for 200 mm wafers will not decline during the forecast period because devices such as microcontrollers; image sensors; display drivers; and few MEMS-based products, including accelerometers, still use 200 mm wafers for manufacturing.
Market challenge: high inventory levels in supply chain
The cyclical nature of the semiconductor equipment industry due to severe downturns affects vendors' operating results. The dynamics of the market during this period consists of risks such as low demand, overcapacity, and price wars outline. Technological and changing customer requirements impact equipment manufacturers considerably. Overcapacity leads to production units performing below their full capacity. This compels semiconductor device manufacturers to reduce their capital expenditure, thereby impacting the demand for equipment, which results in reduced purchases, delay in delivery, or canceled orders. Such factors affect the market growth.
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Some of the major contributors in the global semiconductor etch equipment market:
- Applied Materials
- Hitachi High-Technologies
- Lam Research
- Tokyo Electron
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