Semiconductor Manufacturing Equipment Market Trends

Growth Drivers

• Shift towards electric and autonomous vehicles: The automotive industry's shift toward electric and autonomous vehicles requires more semiconductors, as these vehicles need numerous electronic components for operation. Various governments are rolling out initiatives to strengthen the semiconductor supply chain, primarily through emerging technology sectors, including electric vehicles. In December 2024, the U.S. Department of Commerce reached a preliminary agreement with Bosch to provide up to USD 225 million in subsidies for the production of silicon carbide power semiconductors at its Roseville, California facility. This funding supports Bosch's USD 1.9 billion investment to transform its manufacturing facility, aiming to start producing SiC chips by 2026. The initiative demonstrates that the electric vehicle transition produces substantial capital inflows to create specialized chip production capacities for rising automotive markets.
   
• Demand for smaller node technologies: The semiconductor industry requires advanced manufacturing tools to perform production of 5nm and 3nm process nodes as smaller technology demands are advancing. Organizations are accelerating the development of next-generation lithography solutions that satisfy the scaling requirements of modern-day semiconductor nodes. In December 2023, ASML shipped its first High-NA (Numerical Aperture) EUV lithography system to Intel. This next-generation tool, priced at around USD 300 million, enhances resolution and precision, enabling the production of more complex and efficient chips. The deployment of such systems enables industry progress toward developing enhanced, miniaturized, powerful devices.

Challenges

• Lengthy lead times and equipment delivery: The semiconductor equipment production requires long delivery periods, especially among highly complex tools like EUV lithography machines, creating a significant challenge for chipmakers. The delayed capacity from semiconductor fabrication plants is becoming a problem due to prolonged wait times. Different parts of the manufacturing process cannot adapt quickly enough to handle market requirements, including AI technology, electric vehicles, and consumer electronics. Rapid scaling is also hampering the market, affecting the industry’s agility.