Global Semiconductor Materials Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Global Semiconductor Materials Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Semiconductor Materials market is expected to grow at a CAGR of 4.17% over the forecast period from 2021 to 2026. The increasing advancements in the semiconductor industry and the growing requirements for advanced semiconductor products are some of the major factors driving the investments in the semiconductor material market. Although the semiconductor industry is witnessing a fluctuating growth in revenues currently, the growing need for an advanced product is still motivating the market vendors and end-user organizations to invest in the development of semiconductor materials.

Key Highlights

• Semiconductor materials represent one of the major innovations in the electronics industry. This can be accredited to their high electron mobility, wide temperature limits, and low energy consumption. According to SEMI, worldwide sales of semiconductor production equipment increased 19% from USD 59.8 billion in 2019 to USD 71.2 billion in 2020, setting a new all-time high.
• In the current market scenario, a significant portion of electronic devices, including laptops, smartphones, computers, etc., still use ICs and other semiconductor devices manufactured from silicon substances. Although silicon is still dominating the primary applications in the market, new materials replace the previous substrates and packaging for a few uses.
• For instance, the popularity of GaN material in power semiconductors has led manufacturers to switch to this material. Owing to speed and efficiency, GaN-based transistors are finding newer applications, particularly in optoelectronics, compared to SiC-based ones. GaN has a thousand times the electron mobility than silicon and relatively stable operability at higher temperatures.
• GaN-based transistors are finding new ways, particularly in optoelectronics, in comparison to SiC-based, as being faster and more efficient. GaN has 1000 times the electron mobility than silicon, along with relatively stable operability at higher temperatures as well. ​
• Currently, the most vital challenges in semiconductor electronics include further improvements that would increase data transmission bandwidth, energy efficiency, and information security. Exploiting quantum effects is likely to be a breakthrough. Quantum effects in superconductors could give semiconductor technology a new twist. In December 2021, researchers at the Paul Scherrer Institute PSI and Cornell University in New York State identified a composite material that could integrate quantum devices into semiconductor technology, making electronic components significantly more powerful.
• During the first quarter of 2020, COVID-19 negatively affected the market in terms of disruptions in the supply chains and shut down factories in China and other significant electronics manufacturing countries in Asia, which has created a shortage of semiconductor chips worldwide. As a result, various businesses are focusing on increasing their orders and keeping a stockpile of the required semiconductor components for end-product production to mitigate delays in case of a shortage of components.
• This fueled the market’s growth in 2020 and 2021, which is expected to continue in 2022. In addition, various vendors are focusing on shifting their supply chain away from China due to the effects of the pandemic and its tensions with the United States, which was further aggravated during the COVID-19 pandemic.

Key Market TrendsConsumer Electronics is Expected to Drive Significant Demand

• Increased popularity and affordability of consumer electronics have influenced the growth of semiconductor materials. Consumer electronics such as laptops, tablets, mobile phones, and smartwatches require complex implementation of semiconductor materials, driving the market's growth in the customer electronics segment.
• The smartphone market is the major consumer of semiconductors in this segment. The smartphone market has been very competitive in recent years. The increasing usage of mobile phones is anticipated to drive the market across the world. 5G rollout and growing implementation of IoT technology is further anticipated to drive the growth of the smartphone industry. Telecom operators' growing interest in investing and launching in 5G technology is expected to fuel the demand for 5G capable devices, where consumers and industries are expected to opt 5G devices.
• Silicon carbide (SiC) and gallium nitride (GaN) semiconductor materials show superior properties, allowing for potential operation of power devices at high voltages but especially at high temperatures and switching frequency compared to conventional silicon technology are driving the demand for these materials in consumer electronics.
• The factor driving the demand for SiC material semiconductors is the need for electronic manufacturers to increase the battery life of the device. The trend has been the same for the PC and wearable device markets. The manufacturers want their customers to spend less time charging their devices. Manufacturers like OPPO, One Plus, Motorola, Samsung, and Apple, provide these fast-charging adapters, which is the key to their marketing strategy.
• Furthermore, Gallium nitride (GaN) is a next-generation semiconductor material with characteristics that make it an excellent candidate for use in the devices used to charge mobile devices and other consumer electronics. The material delivers more efficient AC/DC power conversion compared to traditional silicon devices, which reduces wasted energy during charging while also significantly reducing the size and weight of the charger, decreasing life cycle environmental impacts.

Asia Pacific to Hold Significant Share

• Asian Countries such as China, Taiwan, Japan, and South Korea have played a leading role in the development of the semiconductor industry. The Asia Pacific region is projected to account for a major market share in the Global Semiconductor Materials market owing to increasing demand for wireless technologies and consumer electronic products from emerging economies such as India, Taiwan, and China.
• Taiwan is one of the largest manufacturers of semiconductors in the world. The country is home to Taiwan Semiconductor Manufacturing Limited (TSMC), United Microelectronics Corporation, and other major players, driving the country's semiconductor industry. Moreover, according to the SEMI's March 2021 report, Taiwan remained the world's largest consumer of semiconductor materials for more than a decade. A similar trend is expected in the coming years based on the strength of the country's large foundry capacity and advanced packaging base.
• While China's semiconductor industry is aggressively moving to build partnerships with international players to strengthen its prowess amid the US-China trade war, Taiwan semiconductor supply chains, specifically backend service providers OSAT providers, are expected to benefit from robust partnership activities significantly.
• Furthermore, in South Korea, the country has been boosting its semiconductor materials manufacturing through government lend initiatives. For instance, in May 2021, The government announced to offer around KRW 1 trillion in long-term loans for increasing capacity of 8-inch wafer chip contract manufacturing and investment for materials and packaging.
• A similar trend has been observed in countries like India, wherein the government is pushing for the development of regional semiconductor industries in an attempt to reduce their dependency on other countries. Such trends are further anticipated to augment the demand of the semiconductor materials industry in the region.

Competitive Landscape

The semiconductor materials market is quite competitive and consists of significant players. However, in terms of market share, few of the major players, such as LG Chem Ltd, Kyocera Corporation, Intel Corporation, etc., currently dominate the market. However, with the help of technological advancements, product innovations, and partnerships, mid-size to smaller companies increase their market presence by securing new contracts and tapping new markets.

• October 2021 - BASF and Entegris signed an agreement on the sale of the Precision Microchemicals business to Entegris for USD90 million. The transaction includes technologies, intellectual property, and trademarks and is expected to be completed by the end of 2021. The Precision Microchemicals business is part of the Surface Treatment business unit of BASF’s Coatings division, operating under the Chemetall brand. It develops, manufactures, and markets high purity materials, including cleaning chemistries and Chemical Mechanical Planarization (CMP) slurries used in the machining and surface conditioning of electronic materials.
• October 2021 - Showa Denko Materials Co. Ltd announced the mass production of the “MCL-E-795G” series, advanced functional laminate material for printed wiring boards. MCL-E-795G achieves high packaging reliability such as low warpage and high heat resistance required for semiconductor package substrates used for large servers in data centers and high-performance computing (HPC).

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

BASF SE
LG Chem Ltd
Indium Corporation
Showa Denko Materials Co. Ltd
KYOCERA Corporation
Henkel AG & Company KGAA
Sumitomo Chemical Co. Ltd
Dow Chemical Co.
International Quantum Epitaxy PLC.
Nichia Corporation
Intel Corporation
UTAC Holdings Ltd

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