Market Trends of Semiconductor Laser Industry
The Inspection & Metrology Segment is Expected to Hold a Major Market Share
- Smartphones & other applications across consumer electronics, automotive applications, etc., drive the need for high-performance, low-cost semiconductor chips. Technology transitions have encouraged these industries, including wireless technologies (5G), Artificial Intelligence, etc. Also, the trend of growing Internet of Things (IoT) devices is expected to push the semiconductor industry to invest in this equipment to achieve smart products.
- Moreover, the increasing digitization and trends of remote work and operations have sparked the requirement for advanced semiconductor devices that allow various new capabilities. As the need for semiconductor devices intensifies consistently, advanced packaging techniques deliver the form factor and processing power needed for today's digitized world. According to the Semiconductor Industry Association(SIA), during August 2022, global semiconductor industry sales were USD 47.4 billion, a slight increase of 0.1% over the August 2021 total of USD 47.3 billion. Such an expansion in the semiconductor requirement is anticipated to offer lucrative opportunities for the growth of inspection and metrology equipment.
- Furthermore, capacity developments in the semiconductor industry are also aiding the growth of the studied market. For instance, according to SEMI Equipment Market Data Subscription (EMDS), the semiconductor industry's foot is firmly on the accelerator as the capacity expansion efforts are also aiding the expansion of the front-end and back-end semiconductor equipment industries to meet growth drivers.
- Billings for semiconductor equipment in the first quarter of 2023 increased 9% year-over-year to USD 26.8 billion. Advanced logic and foundry capacity expansions, DRAM investment recovery, and robust NAND Flash spending drove equipment market growth. As metrology and inspection are crucial processes involved in the manufacturing of semiconductor chips, such trends also create a favorable outlook for the laser market.
- Further, according to WSTS, in 2022, semiconductor sales reached USD 580.13 billion worldwide. Semiconductors are crucial in electronic devices, and the industry is highly competitive. The YoY growth rate in 2022 reached 4.4 percent and is anticipated to grow more in the coming future. Such trends are anticipated to support the growth of metrology and inspection equipment and associated laser systems during the forecast period.
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The Asia Pacific Region is Expected to Witness a High Market Growth
- The Asia-Pacific is one of the main regions for the semiconductor industry's manufacturing and consumption. According to Semiconductor Equipment and Materials International (SEMI), China's semiconductor equipment spending surpassed USD 28.27 billion in 2022. Moreover, in South Korea, spending amounted to USD 21.51 billion, while in Taiwan, it stood at USD 26.82 billion during the same period. As lasers are widely used in semiconductor equipment, such trends favor the studied market's growth.
- The region also boasts many initiatives by governments to boost the semiconductor industry. For instance, the Chinese government's National Integrated Circuit Industry Development Guidelines and the Made in China 2025 initiative aim to bolster the growth of the local semiconductor industry in the country, reducing the level of dependence on other countries.
- A similar trend is being observed across other countries. For instance, India's Ministry of Electronics and Information Technology (MeitY) recently approved a comprehensive PLI scheme for developing semiconductor & display manufacturing ecosystems. Incentives worth INR 76,000 crore (USD 9.81 billion) are to be distributed over the next six years. Such initiatives in the region are expected to drive the growth of the ecosystem of the semiconductor industry, creating opportunities in the laser market as well.
- Semiconductors remain the backbone material of electronics integrated with modern devices such as cars, smartphones, robots, and many other intelligent devices; driven by the continuous need for miniaturized and robust chips, current semiconductor manufacturing technologies face increasing pressure. The growing adoption of consumer electronics and automobiles in the Asia Pacific region also creates a favorable outlook for the growth of the studied market.
- Japan holds a unique place in the studied market as the country is among the leading suppliers of semiconductor equipment and materials. According to SEMI, Japan accounts for more than 30% of the global semiconductor manufacturing equipment and material sales. Hence, the country is anticipated to hold notable growth opportunities for lasers used in the semiconductor industry.
- The semiconductor need has grown significantly in the Asia Pacific region in recent years. As prominent semiconductor customers in several countries strengthen their supply chains, investments in the semiconductor industry value chain are further accelerated. For instance, in July 2022, GigaphotonInc., a manufacturer of light sources used primarily in semiconductor lithography, announced that it would increase its production capacity by 2.5 times by constructing a new building in Japan. The company invested around JPY 5 billion (USD 36.2 million) in the construction of the new facility, which is expected to be completed by June 2023. Such investments would boost the semiconductor industry's expansion of the laser market.
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