Physical Vapor Deposition (PVD) Market Size, Share & Industry Analysis, By Category (Equipment, Material, and Services), By Application (Data Storage, Microelectronics, Solar Products, Cutting Tools, Medical Equipment, and Others), and Regional Forecast, 2024-2032

The global physical vapor deposition market size was USD 27.10 billion in 2023 and is projected to grow from USD 29.41 billion in 2024 to USD 57.04 billion in 2032 at a CAGR of 8.6% during the forecast period 2024-2032. Asia Pacific dominated the physical vapour deposition market with a market share of 48.45% in 2023. Moreover, the physical vapor deposition market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 8.31 billion by 2032, driven by the presence of giant medical equipment manufacturers & microelectronics in the U.S. led to strong demand & steady growth of services.

Physical vapor deposition is a coating technique performed under vacuum conditions. It involves processes such as evaporation, transportation, reaction, and deposition at the atomic level.  The process is environmentally friendly and is used to enhance the surface properties of inorganic or organic substrates. Diversified application of PVD in electronics, automotive, medical, and other end-use industries is driving the growth of the market. Also, the expansion activities of leading key players support the growth of the market in emerging economies. For instance, in April 2024, Oerlikon Balzers expanded its coating operations in Asia with its first customer center in Vietnam. The company has strategically invested in expanding its presence in the growing Asian market.  

Owing to the production disruption in key end-use industries, the demand for all categories went down significantly during 2020. As the PVD industry does not fall under essential services, it experienced a negative impact on the year-on-year growth rate due to decreased demand from key applications such as electronics, solar components, cutting tools, and others. As the PVD equipment manufacturing, material supplying, and coating services are labor-intensive processes. The complete and partial lockdown in most of the key consuming and supplying countries resulted in workforce unavailability, raw material shortage, and trade restrictions.

Key coating suppliers such as Impact Coatings AB reported delays in coating deliveries due to travel restrictions, quarantine rules, and other constraints. However, such companies adopt mitigation strategies such as meetings through video conferences, managing local company representatives under COVID-19 safety guidelines. The still going pandemic is limiting the growth of the market in 2024. However, with the collective efforts of suppliers and regional governments to normalize the operations, the key market is expected to recover slowly in the coming years.  

Physical Vapor Deposition Market Trends

Focus on Eco-friendly Coating Processes to Aid Market Growth  

The physical vapor deposition process is environmentally friendly. The coating process does not create any hazardous waste compared to other types of coating, such as electroplating or painting. The possibility of releasing toxic material into the environment is very low. Moreover, the PVD-coated products last longer, which reduces the risk of solid waste generation and indirectly helps keep the environment clean.

This process uses environmentally safe materials such as chromium nitride (CrN) and titanium nitride (TiN). Such material can also be coated on the top of corrosion-resistant electroplating, enhancing the decorative & wear-resistant finish. Thus, this deposition offers superior performance characteristics without the risk of environmental hazards.

With the increasing importance of defining sustainable goals, consumers and manufacturers are shifting their preferences towards eco-friendly materials & processes. For instance, Kloeckner Metals has installed physical vapour processes on their new equipment, which offers a great way to reduce the company’s environmental footprint. Many other companies have started using PVD over other non-eco-friendly alternatives to meet sustainable goals. Therefore, these initiatives are expected to bode well for the global physical vapor deposition market growth during the forecast period.

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Physical Vapor Deposition (PVD) Market Growth Factors

Increasing Adoption of Digitization Solutions to Propel Market Growth  

Over the years, digitization has played an important role in shaping economies by creating new business opportunities and productivity gains. Sectors with a higher level of digitization demonstrated productivity growth. Sectors such as media, finance, travel, healthcare, retail, manufacturing have adopted digitization to improve connectivity and establish a resilient value chain. With the favorable growth of these end-use industries, the Electronics System Design & Manufacturing (ESDM) industry is expected to grow significantly during the forecast period. The rising importance of artificial intelligence, machine learning is creating enormous demand for electronic goods across the world.

Physical vapor deposition technology is playing an important role in enhancing the performance of electronic components. For instance, in the automotive industry, the transparent & thin nature of the coating allows the light and electromagnetic waves to pass through the coated components. It is vital to integrate multi-sensor technology in the latest generation of cars. It also plays a key role in improving the aesthetics and safety features of electronic components in the vehicle.

In both developed and emerging economies, huge investments by public & private stakeholders backed by strong policy support and continuous rising demand for electronic products are expected to contribute to the growth of the global market.

Stronger Demand from Medical Device Industry to Drive the Market Growth

Physical vapor deposition technology is widely adopted to coat medical devices such as pacemakers, orthopedic implants, orthodontic appliances, dental instruments, surgical instruments, and others. The biocompatibility of PVD material makes it suitable for the medical device industry. According to the test conducted by ISO 10993-1 guidelines, materials such as TiN, ZrN, AlTiN, TiAlN, CrN, and others are accepted to be used in medical devices, coming in contact with skin, blood, or bones. The PVD coating offers excellent chemical & wear resistance; reduces friction; and improves aesthetics. The PVD coating is also compatible with the sterilization processes that are paramount in the healthcare industry.

Owing to consumer spending on healthcare and the rising prevalence of chronic diseases, the medical device industry is expected to indicate significant growth in both emerging and developed economies. Moreover, the collective efforts of regional governments and leading key players to develop strong healthcare infrastructure are expected to generate lucrative opportunities for PVD technology in the upcoming years.

RESTRAINING FACTORS

High Services Cost & Fluctuating Raw Material Prices to Limit the Market Growth

Some of the processes operate at relatively higher temperatures and under vacuum. Thus, special attention and a technically skilled workforce is required to attain expected results. The high temperature involves the provision of cooling water systems to channelize large heat loads. Such factors significantly improve the overall service cost. Thus, the higher cost sometimes limits the adoption of this technology than its alternative technologies.

Fluctuating prices of common materials used in these coatings such as chromium, zirconium, aluminum, titanium is limiting the growth of raw material suppliers and service providers. The operating cost of physical vapor deposition coating includes material, electricity, common gases (such as nitrogen and argon), and periodic maintenance. The material represents the highest consumable cost. Thus, the fluctuating raw material prices directly affect the profit margin for small & medium scaled suppliers.

Physical Vapor Deposition Market Segmentation Analysis

By Category Analysis

PVD Equipment Segment to Dominate the Global Market

Based on category, the global physical vapor deposition market is segmented into equipment, material, and services. The equipment refers to thin film deposition devices used for thermal evaporation, sputter deposition, and arc vapor deposition. They are used in various industries across the globe. Asia-Pacific is expected to witness the fastest growth, followed by North America and Europe. Equipment such as thin film deposition is used in various applications on solar products, microelectronics, data storage, medical, and other applications. Owing to thickness, uniformity, reflectivity, adhesion, thin film deposition is projected to gain traction in different end-use industries.

PVD materials are titanium, aluminum, zirconium, stainless steel, copper, & gold (for specific applications). These materials can be applied to various substrates, including nylon, plastics, glass, ceramics, and metals, across different applications. Material provides abrasion and corrosion resistance, wear resistance, conductivity, and barrier protection. Also, the eco-friendly nature of material is aiding the growth of this segment in the global market. 

The PVD services segment is the fastest-growing category in the global market. Coating services are used in different industries because they are environmentally friendly and wear-resistant. Companies are conducting constant research to find new applications of coatings and improve products performance. For instance, Australian start-up Plasmakote offers thin-film coatings called ABACO. It possesses unique antibacterial properties that prevent the growth of bacteria on the deposited surface. Thus, the presence of such innovative products is expected to positively impact the growth of the services segment during the forecast period.

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By Application Analysis

Microelectronics Segment Held the Largest Market Share in 2023

On the basis of application, the market is segmented into data storage, microelectronics, solar products, cutting tools, medical equipment, and others.

The global market is dominated by the microelectronics segment, which accounted for more than one-third of the global market value in 2023. Microelectronics is a subfield of electronics, and PVD processes are used in device fabrication and seed layers for plating. These coatings are hard, homogeneous, and possess high-temperature durability and excellent abrasion strength, which advances microelectronics performance. The microelectronics market is growing at a significant rate across the globe. China, India, Japan, the United States, Germany, and Brazil are the key economies to augment the growth of this segment.

The Increasing usage of smartphones in urban and rural areas, growth in innovative technologies, and the rising e-commerce sector are some of the major factors driving the growth of the data storage segment. The growing demand for data analytics by all manufacturing & service industries fuels the demand for data storage devices.

PVD is widely used in solar products such as solar panels, solar cells, and others. The increasing adoption of solar energy as a clean energy source is expected to propel the demand for solar products in the near future. Thus, increasing usage of solar panels and solar cells paves the way for the growth of the market for physical vapor deposition.  

The PVD-coated cutting tools last longer, which decreases cycle time and saves considerable energy. Such coated tools provide resilience power and avoid wear-outs & replacements. These tools can be operated at higher temperatures with less cutting fluid. This, in turn, reduces total production costs.

The medical equipment segment is expected to grow at the fastest rate during the forecast period. Coatings improve performance and extend the life of medical equipment. PVD is widely used to deposit wear-resistant thin-film coatings on various medical equipment, including surgical instruments, orthopedic implants, orthodontic appliances, pacemakers, dental instruments, etc. Several types of medical equipment are primarily manufactured in the United States, China, Germany, India, Japan, and other developed countries. Such economies are expected to drive the market during the forecast period.

The others segment includes PVD applications on decorative films, optical frames, home decor, consumer goods, and other metal applications. Owing to the PVD properties, there is a high demand for the applications mentioned above. Various companies are carrying out continuous research for identifying new applications of equipment and coatings.  

REGIONAL INSIGHTS

Asia Pacific accounted for the largest physical vapor deposition market share in 2023, followed by North America & Europe.

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The size of the market in Asia Pacific was USD 13.13 billion in 2023. The region is projected to showcase exponential growth during the forecast period on account of the fastest growth of PVD end-use industries. China is the leading consumer due to increasing applications in solar products, medical equipment, and others. The region is dominant, with many players possessing a major market share, and few new players are expected to enter the market. It will further boost the growth of the market in the region. India, Japan, and South Korea witness significant growth due to increasing demand for medical equipment and the growth of industrial sectors. PVD coatings are among the fastest-growing products due to the increasing demand for decorative coatings across various industries and environmentally friendly benefits.

North America is one of the largest consumers of these technologies, materials, and services globally. The United States is a leading contributor to the market growth due to technological advancement and well-established supply chains. Physical vapor deposition is significantly used in medical equipment, cutting tools, and solar products, further accelerating the market's growth. Moreover, the presence of giant medical equipment manufacturers & microelectronics in the U.S. led to strong demand & steady growth of services. The innovative coatings products have benefited the end-use industries in achieving sustainable goals along with significant cost savings.

The market in Europe is dominated by countries such as Germany, France, UK, Italy, and Spain. Central and Eastern European countries are expected to provide growth opportunities compared to Western Europe due to developments and expansion of economies. Medical equipment, solar products, microelectronics, etc., are applications with the highest market share in the region. The increasing industrial and manufacturing sector cutting tools segment is also expected to witness significant growth in the market. Major manufacturers in Europe are Hauzer Techno Coatings, MBRAUN Vacuum Deposition, Avatec, Kolzer, Horiba, Chem Europe, and others. Thus, the market in the region is consolidated with different players.

The market in Latin America is anticipated to showcase a steady growth rate due to its increasing application in solar products, medical equipment, cutting tools, and others. Latin American countries suffered economic challenges in recent years, which also impacted the end-use industries of the market. However, the recent resurgence in the Latin American healthcare industry has led to growth opportunities in the region. Healthcare spending in Brazil is growing at a healthy rate of more than 5%. Increasing private & government investment in developing resilient healthcare, medical equipment & pharmaceuticals infrastructure in the country is expected to create a positive environment for the market for physical vapor deposition

The Middle East & Africa is a relatively small market and accounted for decent growth in the global market. GCC accounted for a significant share in the consumption on the back of its infrastructure and high income-generating businesses. Also, these countries have some of the best medical device manufacturing, solar energy generation plants, which positively affects the market. In GCC, Saudi Arabia and UAE are the key contributors to the growth of the market. The increasing consumer electronics industry, automotive manufacturing, solar product manufacturing propels the demand for these technologies in the region. Also, the regional governments are making continuous efforts in shaping the economy from the oil base to other manufacturing & service industries. This, in turn, is expected to positively impact the growth of the market in GCC countries. 

In Africa, South Africa is expected to register the fastest growth in the market. The steadily growing healthcare, automotive, manufacturing sector in South Africa is driving the services and equipment growth. However, countries such as Ghana, Namibia, Kenya, Nigeria witness slow but steady growth due to the slow growth of end-use industries. Most of the sectors are import-driven. Thus usage of PVD is limited in these countries. Solar energy is being generated at a slower pace compared to other countries. Thus the usage of solar products is moderate. Due to such factors, the market is under-developing in many African countries, representing potential opportunities for the growth of the market. Moreover, the growing population in the region is projected to fuel demand for portable electronics and consecutively services in the region.

List of Key Companies in Physical Vapor Deposition (PVD) Market

Leading Players to Focus on Merger & Acquisition to Garner Their Market Presence

With the increasing demand for sustainable coating processes, the competition among key physical vapor deposition suppliers has increased over time. The companies are focusing on acquiring small-scale & local coating suppliers to penetrate the local market. For instance, Oerlikon Balzers acquired the coating businesses of D-Coat GmbH in 2023 and AMT AG & TeroLab Surface GmbH in 2019. The company is expanding its footprints across the European market to offer advanced coating services for surface treatment. Also, companies such as Dynavac, Denton Vacuum are investing in establishing strong coating manufacturing and service facilities.   

LIST OF KEY COMPANIES PROFILED:

• Advanced Energy Industries, Inc. (USA)


• Intevac (USA)


• Oerlikon Balzers (Switzerland)


• Impact Coatings AB (Sweden)


• AJA International, Inc. (USA)


• Dynavac (USA)


• Denton Vacuum (USA)


• Angstrom Engineering, Inc. (Canada)


• CHA Industries, Inc. (USA)


• IHI HAUZER Techno Coating B V (The Netherlands)


• The Kurt J Lesker Company (USA)

KEY INDUSTRY DEVELOPMENTS:

• April 2022: Impact Coatings established a subsidiary in Shanghai, China, to increase the availability of coating solutions and services in the country.


• February 2021: Dynavac announced a significant increase in capital investment, facility size, and workforce. The company focuses on competitive advantage based on growth in both the thin film and space simulation markets. These investments will allow them to keep up with the needs of their customers.


• October 2020: Impact Coatings received the order for an INLINECOATER system from Hyundai Motor Company. It will be used to coat metal bipolar plates for fuel cells. In 2019, both companies signed a joint development agreement (JDA) of EUR 945,000 for the same.

REPORT COVERAGE

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The global physical vapor deposition market research report provides both qualitative & quantitative insights on this market. Quantitative insights include the global market sizing in terms of value (USD Billion) across regions, types, and applications profiled in the scope of the study. Also, the report covers market share analysis and growth rates of segments, sub-segments, and key countries across each region. Qualitative insights cover an elaborative analysis of market drivers, restraints, growth opportunities, and key market trends related to the market. The competitive landscape section covers the detailed profiling of the key players operating in the PVD industry.

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