Semiconductor Equipment Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Semiconductor Equipment Market Trends and Insights

Rapid AI, IoT and Edge-Device Node Investments

Artificial-intelligence inference workloads and distributed edge computing are pushing process nodes below 5 nm, where equipment intensity per wafer rises sharply. OpenAI committed USD 500 million in 2025 to secure advanced-node capacity at Taiwan Semiconductor Manufacturing Company (TSMC), while Microsoft and Amazon Web Services each placed multi-billion-dollar reservations for 3 nm custom silicon. ASML reported a 40% year-on-year increase in EUV tool shipments during the first three quarters of 2025. In contrast, IoT devices stay on mature 28 nm and 40 nm lines, yet emerging edge-AI accelerators combine radio-frequency layers at 22 nm with digital logic at 7 nm, forcing fabs to install heterogeneous packaging lines that merge dissimilar dies. The International Technology Roadmap for Semiconductors projects that by 2028, more than half of high-performance chips will adopt chiplet architectures, each requiring novel assembly, test, and advanced packaging equipment.^{[1]IEEE, “International Technology Roadmap for Semiconductors,” Ieee.org}

Government Subsidy Waves Boosting Tool CAPEX

Legislation such as the United States CHIPS and Science Act and the EU Chips Act compresses procurement cycles that formerly spanned two years. Intel secured USD 8.5 billion in grants plus USD 11 billion in loan guarantees for new fabs in Ohio and Arizona, committing to purchase over 200 leading-edge tools by 2028. Micron, Samsung and Rapidus received similar state support in New York, South Korea and Japan, respectively. India’s Ministry of Electronics and Information Technology approved USD 2.75 billion for Micron’s Gujarat assembly facility, spurring orders for back-end platforms. These incentives front-load demand into the 2026- 2028 window, lifting the semiconductor equipment market yet raising utilization-rate questions once subsidies taper.

Transition to GAA and High-NA EUV Toolsets

Gate-all-around devices replace finFETs at the 2 nm node and below, demanding atomic-layer deposition (ALD) tools with sub-angstrom control and selective-etch chemistries that spare adjacent nanosheets. TSMC’s first 2 nm production line deployed more than 50 new ALD chambers in late 2025. Samsung reported 95% yield on its 2 nm pilot wafers and ordered 30 additional deposition and etch tools to sustain a 2026 ramp. High-NA EUV, operating at 0.55 numerical aperture, shipped its inaugural system to Intel in December 2025 with a USD 400 million price tag and facility modifications for vibration and thermal stability. GAA adds roughly 30% more deposition and etch steps than finFET, creating a durable replacement cycle that supports the semiconductor equipment market through 2031.

3D Heterogeneous-Integration Packaging Demand Spike

Chiplet architectures are transferring performance scaling from monolithic die shrinks to back-end packaging. TSMC doubled its chip-on-wafer-on-substrate capacity in 2025, installing over 40 hybrid-bonding tools from Besi and EVG. Intel’s Foveros Direct technology stacks compute tiles on input-output dies at 25 µm bump pitch, requiring precision aligners and thermal compression bonders from Kulicke and Soffa and ASM Pacific Technology. The Universal Chiplet Interconnect Express standard, ratified in August 2025, is accelerating multi-vendor ecosystems and expanding OSAT capital intensity.

Export-Control Restrictions on China-Bound Tools

From September 2025, the Netherlands, the United States, and Japan tightened licensing for lithography, deposition, and etch platforms capable of sub-14 nm patterning, blocking shipments to Chinese fabs.^{[2]Government of the Netherlands, “Export-Control Regulations,” Government.nl} China’s equipment imports fell 28% year-on-year in 1H 2025, while local suppliers Advanced Micro-Fabrication Equipment and Naura Technology Group grew 42% as fabs accepted older-generation domestic tools. The split forces Western vendors to concentrate high-end sales in Taiwan, South Korea, and North America, while risking long-term share erosion once Chinese producers close the technology gap.

Specialty-Material Supply Bottlenecks Delaying Tool Shipments

Capacity shortfalls in high-NA EUV photoresists, nitrogen-trifluoride etch gases and rare-earth polishing slurries extend commissioning timelines even when hardware arrives on schedule. JSR warned in June 2025 that high-NA resist output would stay tight into mid-2026. A fire at a Taiwanese NF₃ plant lifted gas prices by 22% in 2025, prompting delayed acceptances for deposition chambers. Cerium-oxide export quotas raised slurry costs by 18%, forcing fabs to run pads longer at the expense of higher defect densities.^{[3]Financial Times, “Rare-Earth Export Quotas,” Ft.com}

Segment Analysis

By Equipment Type: Front-End Dominance Anchored by Lithography Intensity

Front-end platforms captured 70.33% semiconductor equipment market share in 2025 and are tracking an 8.16% CAGR through 2031. Lithography alone accounted for 35% of total outlays in 2025, as fabs migrated from 0.33-NA to 0.55-NA EUV systems priced at over USD 400 million each. Etch revenues climbed 9.2% in the same year because GAA structures require selective removal of sacrificial silicon-germanium. Deposition tools, particularly ALD and CVD, grew 8.7% on 2 nm uptake. Metrology and inspection expanded 10.1% as inline defect detection becomes mandatory below 10 nm.

Back-end tools accounted for 29.67% of the semiconductor equipment market in 2025 and will grow at a 6.8% CAGR. Hybrid-bonding equipment for chiplet assembly rose 11% in 2025, while high-bandwidth-memory testers advanced 14% amid 12-die stack adoption. Cleaning and photoresist processing units each improved 7.4%. Although packaging gains relevance, the capital intensity of leading-edge lithography ensures front-end platforms preserve revenue leadership through 2031.

Note: Segment shares of all individual segments available upon report purchase

By Supply-Chain Participant: Foundries Lead, OSATs Accelerate

Foundries absorbed 52.92% of 2025 equipment purchases, underpinned by TSMC’s USD 32 billion and Samsung’s USD 22 billion capex programs. Integrated device manufacturers (IDMs) followed with 28.24%, dominated by Intel’s 18-angstrom and 20-angstrom projects. OSATs held 18.84% but are poised for a 7.84% CAGR as chiplet designs shift complexity toward packaging.

This structure is reshaping supply priorities. Foundries focus on EUV, ALD, and selective-etch, whereas OSATs deploy hybrid-bonding, through-silicon-via, and wafer-level fan-out lines. Rising OSAT capital intensity- from 12% of revenue in 2020 to 16% in 2025- signals a gradual rebalancing of value capture across the semiconductor equipment market.

By Wafer Size: 300 mm Primacy Reinforced by Leading-Edge Economics

The 300 mm segment accounted for 63.42% of 2025 revenue, expanding at an 8.02% CAGR, as 2 nm logic and high-bandwidth memory rely exclusively on this diameter. Intel’s Ohio fab, due in 2027, installs 200 tools optimized for 300 mm wafers, highlighting format lock-in. Conversely, 200 mm lines carry 24.16% share, growing 5.9% on continued analog and power demand that favors silicon-carbide epitaxy. Sub-150-mm wafers serve niche MEMS and compound devices, with a 12.42% share.

Economics drive the split, 300 mm substrates cut die cost by 35% versus 200 mm at 2 nm despite rising defect density, while power modules remain on 200 mm owing to material-quality limits. Suppliers, therefore, maintain parallel 300 mm and 200 mm portfolios, fragmenting scale economies.

Note: Segment shares of all individual segments available upon report purchase

By End-Use Industry: Computing Leads, Automotive Surges

Computing captured 32.12% of equipment demand in 2025 as Nvidia’s 208-billion-transistor Blackwell GPUs consumed over 500 wafer starts weekly. Automotive and mobility, holding 19.8%, are the fastest-growing at 8.44% CAGR, propelled by silicon-carbide inverters and advanced driver-assistance sensors. Communications stood at 22.4% with 5G base station rollouts, while consumer electronics slipped to 15.6% amid lengthening smartphone cycles. Industrial and IoT rounded out demand at 10.08%, driven by factory automation in Germany and Japan.

The result is a pivot from consumer to infrastructure use cases. Automotive customers demand longer tool lifecycles, and hyperscalers require aggressive throughput guarantees, compelling suppliers to bundle predictive-maintenance software with capital sales.

Geography Analysis

Asia-Pacific led the semiconductor equipment market with a 52.97% share in 2025 and is set to post a 9.07% CAGR through 2031. Taiwan alone imported USD 28 billion of tools in 2025 as TSMC installed more than 100 EUV systems across three fabs. South Korea followed with USD 19 billion in spend, split between foundry and memory. Although China’s imports dropped from USD 33 billion in 2024 to USD 24 billion in 2025, domestic vendors shipped over 600 units to local fabs, partially offsetting the impact of export controls.

North America accounted for 24.8% of 2025 revenue and will grow at an 8.3% CAGR, accelerated by the CHIPS Act funding that de-risks Intel, Micron, and Texas Instruments expansions. Europe held 18.6% and is advancing at 7.1% as the European Semiconductor Manufacturing Company builds a EUR 10 billion Dresden fab focused on automotive nodes. The Middle East and Africa together captured 2.1%, driven by sovereign diversification programs, while South America’s 1.53% share stems mainly from Brazilian assembly lines.

Differences in subsidy structures and geopolitical risk are shaping regional allocations of tools. Allied regions move ahead with high-NA EUV, whereas China prioritizes indigenous 28 nm and 14 nm capacity, reinforcing a bifurcated global landscape within the broader semiconductor equipment market.