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The US semiconductor capital spending market size is forecast to increase by USD 10.66 billion. is estimated to grow at a CAGR of 5.31% between 2023 and 2028. The market growth hinges on several key factors, notably the substantial investments directed toward fabs, a surge in consumer electronics and smart device demand, and the ongoing trend of electronic device miniaturization. The steady influx of investments into fabs, or semiconductor fabrication facilities, underscores the industry's commitment to technological advancement and production scalability. Concurrently, the heightened demand for consumer electronics and smart devices, fueled by evolving consumer preferences and technological innovations, drives market expansion. Furthermore, the ongoing miniaturization of electronic devices, driven by advancements in analog semiconductor manufacturing and design, is reshaping product capabilities and driving demand across various sectors. These combined factors create a dynamic landscape for the electronic device market, fostering innovation, competitiveness, and consumer choice.
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This market report extensively covers market segmentation by application (wafer fab equipment, automated test equipment, wafer-level packaging and assembly equipment, die-level packaging and assembly equipment, and others), and end-user (automotive, consumer electronics, telecommunication, and others). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from the historic period 2018-2022.
The market is driven by chip demand and the continuous evolution of consumer electronics. Trends such as Generative AI and the demand for advanced logic chips propel investments in equipment and manufacturing processes by major players like Micron and Intel. However, challenges such as inflation, monetary tightening, and supply chain disruptions due to the war in Ukraine pose significant hurdles. Balancing investment with inventory buildup and ensuring timely execution amidst competition remain critical for sustained growth in this strategic industry.
The surge in demand for consumer electronics and smart electronic devices is the key factor driving market growth. The demand for ICs which are incorporated in these products is also being driven by an increase in the sales of smart goods, e.g. wristwatches, mobile phones, and wireless bands all over the country. Other important applications in the area of integrated circuits and semiconductors are tablets and smartphones. The increase in demand for such products has been driving the demand for semiconductor components, which has been fueling the flow of capital spending into the semiconductor industry.
Furthermore, wire bonding and flip-chip packaging are mainly used in smart devices with a dense number of electronic components. The surge in demand for consumer electronics and smart electrical devices in the US is expected to drive the growth of the market during the forecast period.
Advances in wafer size are the primary trend shaping market growth. The semiconductor industry has emigrated to larger diameter wafers to cut costs by nearly 20%-25%. Nowadays, the industry is broadly using 300-mm wafers for manufacturing ICs. This trend is anticipated to continue with companies funding significant amounts in the construction and advancement of such fabs. For example, in May 2020, Taiwan Semiconductor Manufacturing Company (TSMC) announced plans to build a fab in Arizona, US.
Moreover, the US - semiconductor capital spending market will continue to witness demand for 200-mm wafers as well in the next five years. Nowadays, many manufacturers of semiconductor components are focusing on 450-mm wafer technology. The changes in wafer sizes will create the need for assembly and packaging equipment in the US semiconductor industry. This is expected to drive the growth of the market during the forecast period.
The cyclic nature of the semiconductor industry is a challenge that affects market growth. The semiconductor sector is very volatile due to its cyclical nature. An overcapacity in production, outdated products, and rapidly falling prices for integrated circuits are some of the circumstances that may cause market downturns or have a significant impact. Wide fluctuations can often lead to excess inventory levels in times of low demand and low inventory levels in times of high demand.
Moreover, the fluctuations in demand for these products are attributed to factors such as technological developments or advances in the product, which make the previous versions obsolete and hence less preferred in the market, as well as the excess production of semiconductor components. Fluctuations in demand may impede the growth of the market during the forecast period.
The market is a complex ecosystem influenced by a myriad of factors. Chip demand drives investments in equipment and manufacturing processes, with major players like Micron and Intel leading the charge. Amidst global challenges like inflation and monetary tightening, the war in Ukraine has added additional pressure on supply and capacity in the semiconductor industry. Semiconductor firms must navigate inventory buildup while maintaining yields and ensuring timely execution of projects. Government subsidies and investment tax incentives play a crucial role in sustaining the industry's growth and competitiveness. Emerging technologies like Generative AI are reshaping the landscape, driving demand for advanced logic chips and devices in consumer electronics.
The market share growth by the wafer fab equipment segment will be significant during the forecast period. Wafer production equipment comprises processes for the manufacture of front-end semiconductors, such as deposition, lithography photolithography, and etching. The manufacturing equipment required for these processes takes care of wafer processing to achieve the required level of purity of silicon wafers, thus ensuring the production of high-quality ICs.
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The wafer fab equipment segment showed a gradual increase in the market share of USD 13.17 billion in 2018. Furthermore, the equipment used during the different production processes, including deposition, etching, and photo masking, is upgraded with advanced technology to ensure a high production yield. All these factors contribute to the increasing adoption of wafer-fab equipment in the US, thereby driving the growth of the US - semiconductor capital spending market during the forecast period.
The automotive industry has a major impact on the semiconductors sector. In the past few years, there has been an unprecedented shift from cars to electrical vehicles and improvements in connectivity that have led to a boom in demand for advanced semiconductor technologies. Additionally, it is anticipated that automotive applications will continue to be a major factor in the US market's growing semiconductor capital spending as 5G and the Internet of Things (IoT) advance. Hence, the demand for semiconductors is expected to increase from the automotive sector in the US, thereby driving the growth of the US - semiconductor capital spending market during the forecast period.
The Market 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 includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market 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 research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative market growth 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 market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments
The Market is deeply influenced by various factors, including chip demand, inflation, monetary tightening, and the war in Ukraine. These elements contribute to a complex landscape where supply and capacity considerations significantly impact memory spending and the operations of chipmakers. Companies like Micron play a pivotal role in manufacturing chips, investing in tool and facility upgrades, and enhancing manufacturing process efficiencies to improve yields. The market dynamics are shaped by the demand for logic chips and analog chips, driving competition and necessitating ongoing CapEx spending.
However, the market also faces challenges such as inventory buildup, geopolitical risks, and volatility. Factors like the CHIPS Act, investments in Generative AI, and strategic decisions by major players like AMD, Texas Instruments, STMicroelectronics, and Infineon Technologies further influence the market landscape. The automotive market, data centers, and economic security considerations contribute to the sector's overall health, amid price declines and cyclical trends. Navigating this environment requires careful CapEx decisions and a keen understanding of market trends to capitalize on boom years and manage challenges during peak growth periods.
Furthermore, the Market is a dynamic arena influenced by various critical factors. Nodes represent crucial stages in semiconductor development, dictating capabilities and performance. Semiconductor firms play a pivotal role, driving innovation and shaping the industry's trajectory. The semiconductor value chain encompasses everything from design to manufacturing, each segment contributing to the sector's overall success. Analog chips are vital components for various applications, ensuring seamless functionality in electronic devices. Government subsidies and investment tax incentives often fuel advancements in the industry, making it a strategic and lucrative investment opportunity for many. Timely execution of projects is crucial, as factories need to be efficient and equipped with the latest technology to produce cutting-edge GPUs and other semiconductor products. The Semiconductor market is highly competitive, with major players vying for market share and catering to stockholders' expectations.
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 10.67 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.85 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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 research and growth, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
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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