Consulting firm, Global Market Insights, recently published a report stating the global semiconductor manufacturing equipment market will reach $80 billion in value by 2026. The group maintains the worldwide electronic component segment had a total value of over $55 billion in 2019.
However, the organization believes technological advancement, government development initiatives, and vehicle electrification will drive the sector’s rapid expansion.
The Future Does Not Come Cheap
The consultancy noted consumers, companies, and government agencies demand meaningful improvements with each new wave of technological innovation. That market pressure pushes semiconductor equipment manufacturers to develop new production methodologies and tools to support iterative advancement. But the progression of microelectronics fabrication comes with significant increases in equipment cost.
For instance, ASML’s extreme ultraviolet lithography (EUV) machines enable the Taiwanese Semiconductor Manufacturing Company (TSMC) to produce best-in-class 5nm nodes. But the Dutch equipment maker’s state-of-the-art etching tools cost around $150 million each.
Similarly, 2.5D memory architecture offers a higher level of performance and bandwidth compared to older technology. But chipmakers will need to make significant capital expenditures to modernize their production lines.
Global Market Insights’ anticipates EUV and 2.5D architecture technology will expand the semiconductor manufacturing equipment market by 6 and 7 percent every year, respectively, through 2026. Those two innovations will help tech brands build tomorrow’s digital infrastructure, but constructing the future will not be cheap.
Government Domestic Semiconductor Sector Support Programs
One of the biggest technology trends of 2020 is the widespread push for greater national semiconductor independence.
Last week, South Korea revealed it would pour $843 million into developing its local electronics component manufacturing industry. Bloomberg recently reported China intends to launch a comprehensive education, research, and funding program to improve its domestic (integrated circuit) IC sector.
In addition, Taiwan unveiled a $334 million initiative to entice semiconductor manufacturers to establish new facilities in-country in June. Shortly thereafter, India announced it would offer $6.6 billion in subsidies to tech brands that build-out its electronic components ecosystem.
China, India, South Korea, and Taiwan’s interest in establishing world-class chipset design and production resources will have a lasting impact. Global Market Insights’ asserts the Asia Pacific region’s need for cutting-edge semiconductor manufacturing equipment will grow the industry by 7 percent annually.
Vehicle Electrification is an Emerging Growth Driver
Lastly, the rising popularity of battery-powered vehicles is driving the expansion of the worldwide electronic component fabrication tool sector.
Right now, vehicle electrification is not a significant needle mover.
Global Market Insights states non-fossil fuel-based personal transports only represented 2.6 percent of the global auto sales in 2019. That said, the consultancy also predicts electric cars’ popularity in the broader automobile industry will increase by 40 percent annually through 2026.
Electric vehicle market leader Tesla, which recently became the world’s most valuable carmaker, supports the research group’s forecast. TSMC and NXP Semiconductors recently announced a partnership to develop advanced automobile components, which lends further credence to the firm’s projections. The environmental, financial, and personal comfort benefits offered by battery-power sedans make their global prevalence all but inevitable.
Global Market Insights’ semiconductor manufacturing equipment report covers a wide variety of developments, market segments, and regions. But the firm’s analysis is unified by one theme; the world’s increasing embrace of technology is pushing the electronic components sector to new heights.