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The US semiconductor capital spending market in US size is forecast to increase by USD 10.66 billion at a CAGR of 5.31% between 2023 and 2028. The market in the US is experiencing significant growth, driven by increasing investments in fabrication plants to meet the rising demand for advanced semiconductor technologies. Another key trend is the continuous advancements in wafer size, enabling the production of more chips per wafer and reducing manufacturing costs. Furthermore, the high dependence on a limited number of key suppliers for critical semiconductor components creates both opportunities and challenges for market participants. On the one hand, this concentration can lead to economies of scale and improved efficiencies. On the other hand, it can also result in supply chain risks and price volatility.
Overall, the US semiconductor capital spending market is expected to grow steadily in the coming years, driven by these trends and the ongoing demand for advanced semiconductor technologies.
The semiconductor capital spending market in the US is driven by the increasing chip demand from various end-use industries, including consumer electronics and generative AI. However, several factors, such as inflation and monetary tightening, pose challenges to semiconductor firms in their investment decisions. The ongoing war in Ukraine and geopolitical tensions have also added uncertainty to the market. Despite these challenges, semiconductor firms continue to invest in manufacturing chips, with a focus on advanced nodes and capacity expansion. Memory spending is expected to dominate the market due to the growing demand for data storage and processing. The manufacturing process involves significant investment in tool and facility upgrades to improve yields and remain competitive.
The investment in semiconductor factories and equipment is a strategic industry move, with chipmakers aiming for timely execution to meet the rising demand for logic chips. However, inventory buildup and competition from subsidies and investment tax incentives in other regions may impact the US market's growth. The semiconductor industry's resilience and ability to adapt to these challenges will determine its future growth trajectory.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The wafer fab equipment segment is estimated to witness significant growth during the forecast period. The semiconductor capital spending market in the US is influenced by various factors, including chip demand, inflation, monetary tightening, and geopolitical risks. Chipmakers invest heavily in manufacturing chips using advanced nodes, memory spending, and capacity expansion to meet the increasing demand for semiconductors in consumer electronics, data centers, and generative AI. Inflation and monetary tightening impact the cost of manufacturing, as well as the availability and cost of financing for semiconductor firms. The ongoing war in Ukraine and other geopolitical risks add to the uncertainty, potentially disrupting supply chains and increasing costs. The manufacturing process involves the use of various tools and facilities to produce high-quality ICs from silicon wafers.
This includes photomasking and photolithography processes, which require precision and timely execution to ensure optimal yields. Semiconductor value lies in logic chips, analog chips, and memory chips, with competition among chipmakers driving investment in new manufacturing processes and equipment. Subsidies and investment tax incentives are used to attract investment in this strategic industry, while economic security concerns drive demand for semiconductors in areas such as data centers, GPUs, and consumer electronics. Factories producing semiconductors require significant capital expenditures for tool and facility upgrades to maintain a competitive edge.
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The wafer fab equipment segment was valued at USD 13.17 billion in 2018 and showed a gradual increase during the forecast period.
Our market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing investments in fabs is the key driver of the market. The semiconductor industry in the US is witnessing a wave in demand for fabrication plants, or fabs, due to the increasing adoption of emerging technologies such as IoT and AI. Major semiconductor companies, both integrated device manufacturers (IDMs) and foundries, are responding to this trend by investing in new fabs to meet the growing need for silicon wafers and semiconductor components. This capital expenditure (CapEx) decision is driven by the cyclical trend of the semiconductor market, which is known for its volatility and risky proposition. Overcapacity in the market and intense competition further highlight the importance of timely CapEx decisions to stay competitive.
As stockholders look for growth opportunities, the construction of new fabs presents an attractive proposition for companies to expand their operations and cater to the increasing demand for semiconductor devices in the US.
Advances in wafer size is the upcoming trend in the market. The semiconductor industry in the US has undergone significant transformations over the past five decades, with major players increasingly adopting larger diameter wafers to reduce costs by approximately 20-25%. Currently, the industry predominantly utilizes 300-mm wafers for manufacturing Integrated Circuits (ICs). This trend is anticipated to persist during the forecast period, with companies making sizeable investments in constructing and upgrading such facilities. For instance, in May 2020, Taiwan Semiconductor Manufacturing Company (TSMC) unveiled plans to build a new fab in Arizona, US, with an initial capacity of 20,000 wafer starts per month. This cyclical trend, however, comes with inherent risks and volatility for stockholders due to the capital-intensive nature of semiconductor CapEx decisions.
High dependence on a limited number of key suppliers is a key challenge affecting the market growth. The semiconductor capital spending market in the US is primarily driven by major semiconductor companies' investments in building and expanding fabs to meet increasing demand for advanced technology chips. Stockholders closely watch CapEx decisions made by these companies due to the cyclical trend and inherent volatility of the semiconductor industry. Overcapacity and risky propositions associated with building new fabs make capex decisions a critical factor for these companies. However, the relationship between semiconductor equipment manufacturers and their wafer fab suppliers plays a significant role in the success of these projects. Dependence on a few key suppliers for raw materials, components, and facility management can create vulnerabilities.
Delays or non-performance on their part can lead to project delays or even order cancellations. Moreover, any leak of intellectual property (IP) information from suppliers can have severe consequences for semiconductor equipment manufacturers, potentially damaging their business reputation and financial performance.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The semiconductor capital spending market in the US is driven by the strong demand for chips in various industries, including consumer electronics, data centers, and automotive. However, several factors pose challenges to semiconductor firms in their investment decisions. Inflation and monetary tightening have increased the cost of manufacturing chips, tool and facility, and equipment. The ongoing war in Ukraine and geopolitical risks have added uncertainty to the supply chain. Semiconductor firms are investing heavily in advanced nodes to improve yields and stay competitive. Memory spending continues to dominate the semiconductor capital spending market, with logic chips and analog chips following closely.
The manufacturing process for chips has become increasingly complex, requiring significant investment in tool and equipment. The semiconductor industry is a strategic industry, with governments offering subsidies and investment tax incentives to attract semiconductor factories. Timely execution of capex spending is crucial for semiconductor firms to meet the growing demand for devices, including GPUs, STMicroelectronics, and Intel's manufacturing chips. The semiconductor value chain is undergoing significant changes, with the emergence of generative AI and the increasing importance of economic security.
Market Scope |
|
Report Coverage |
Details |
Page number |
148 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.31% |
Market Growth 2024-2028 |
USD 10.66 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.85 |
Key companies profiled |
Advantest Corp., Amtech Systems Inc., Applied Materials Inc., ASM International NV, Carl Zeiss AG, Dow Chemical Co., Hitachi Ltd., Intel Corp., KLA Corp., KYOCERA Corp., Nichia Corp., Nova Measuring Instruments Ltd., Onto Innovation Inc., Samsung Electronics Co. Ltd., Screen Holdings Co. Ltd., Sumitomo Heavy Industries Ltd., Teradyne Inc., Tokyo Electron Ltd., Veeco Instruments Inc., and Henkel AG and Co. KGaA |
Market dynamics |
Parent market analysis, market growth inducers and obstacles,market forecast , fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
We can help! Our analysts can customize this market research report to meet your requirements Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Drivers, Challenges, and Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
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