Semiconductor Materials Market Size, Share & Industry Analysis, By Type (Wafer Fab Materials and Packaging Materials), By End-user (Consumer Electronics, Automotive, Telecommunications, Industrial, Healthcare, Aerospace and Defense, and Others), and Regional Forecast, 2024 – 2032

The global semiconductor materials market size was valued at USD 66.93 billion in 2023. The market is projected to grow from USD 69.39 billion in 2024 to USD 96.24 billion by 2032, exhibiting a CAGR of 4.2% during the forecast period.

The semiconductor materials industry is involved in the production, distribution, and sale of materials used in the manufacturing of semiconductor devices. These materials are critical components in the production of electronic devices such as integrated circuits (ICs), microchips, transistors, light-emitting diodes, and solar cells. The market is driven by the increasing demand for advanced electronics, such as smartphones, computers, and automotive electronics, and fueled by trends such as 5G, IoT, and AI. In addition, the ongoing funding and the need for more efficient, powerful semiconductors are propelling innovations in material technologies. For instance,

• In July 2023, the Japanese government subsidized Sumco's new silicon wafer factories in southern Japan with up to USD 530 million to strengthen the country's semiconductor supply chains.

The COVID-19 pandemic disrupted the market by causing supply chain delays and a shortage of semiconductor materials due to factory shutdowns and logistics challenges. However, the surge in demand for electronics to support remote work, online learning, and digital transformation helped offset some of the negative impacts, leading to a rapid recovery in the market.

Semiconductor Materials Market Trends

Shift toward Advanced Packaging to Fuel the Demand for Semiconductor Materials

The shift toward advanced packaging technologies, such as System-in-Package (SiP) and 3D ICs, is boosting the demand for semiconductor materials. These packaging methods allow for higher performance and greater efficiency by integrating multiple semiconductor chips within a single package, which is essential for applications such as 5G and AI. For instance, Fan-Out Wafer-Level Packaging (FOWLP) is being increasingly used in smartphones and data centers, requiring specialized materials such as high-purity silicon wafers and advanced photoresists. Companies such as TSMC and Intel are leading in adopting these technologies to overcome the limitations of traditional scaling, thereby driving the need for innovative materials that support complex manufacturing processes. This trend is fueling the semiconductor materials market share.

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Semiconductor Materials Market Growth Factors

Increasing Use of Consumer Electronics Such as Smart Phones, Tablets, and Wearables Drives the Market Growth

The rising popularity of consumer electronics, including smartphones, tablets, and wearables, is significantly driving the market growth. Devices such as Apple's iPhones and Samsung's Galaxy series demand highly advanced semiconductors to deliver improved performance, power efficiency, and compact designs. Similarly, the growing adoption of smartwatches and fitness trackers, such as the Apple Watch and Fitbit, requires miniaturized and efficient semiconductor components. These devices rely on advanced materials, including high-purity silicon carbide, specialty chemicals, and advanced packaging materials, to meet the performance and form factor requirements. Consumer electronics continue to evolve with features such as 5G connectivity and AI integration, increasing the demand for innovative semiconductor materials and fueling the semiconductor materials market growth.

RESTRAINING FACTORS

High Production Costs May Limit the Market Expansion

The manufacturing of advanced semiconductor materials, such as high-purity silicon wafers, specialized photomasks, and advanced packaging materials, requires advanced technology and stringent quality controls, driving up costs. In addition, the complexity of producing materials that meet the demands of next-generation applications, such as 5G and AI, further increases expenses. These high costs can limit the ability of electronics manufacturers to scale production, particularly in a highly competitive market where pricing pressures are intense. Therefore, the high cost of production can act as a barrier to market expansion, especially for smaller players or those in regions with less developed manufacturing infrastructure.

Semiconductor Materials Market Segmentation Analysis

By Type Analysis

Increasing Production of Integrated Circuits to Drive Wafer Fab Materials Segment Growth

By type, the market is classified into wafer fab materials and packaging materials.

The wafer fab materials segment dominates the market because they are essential for manufacturing semiconductor devices. Silicon wafers and materials used in photolithography and etching are crucial for producing integrated circuits and chips, making them a core component in the production of electronic devices and driving their largest market share.

The packaging materials segment is expected to grow at the highest CAGR in the market during the study period due to the increasing complexity and miniaturization of semiconductor devices. Advanced packaging technologies, such as 3D ICs and Fan-Out Wafer-Level Packaging (FOWLP), are essential for improving performance and efficiency, driving demand for innovative packaging solutions.

By End-user Analysis

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Burgeoning Demand for Consumer Electronics to Boost the Segment Growth

In terms of end-user, the market is categorized into consumer electronics, automotive, telecommunications, industrial, healthcare, aerospace and defense, and others.

The consumer electronics segment dominates the market because semiconductor components are crucial for devices such as smartphones, tablets, and wearables. The rapid advancement and high demand in this sector leads to significant consumption of semiconductor materials, as these devices rely on sophisticated, high-performance chips.

The automotive segment is expected to grow at the highest CAGR during the assessment period due to the increasing integration of advanced electronics in vehicles, such as autonomous driving systems, infotainment, and safety features. As automotive technology evolves and electric vehicles become more prevalent, the demand for semiconductor materials used in these sophisticated applications is rising rapidly.

REGIONAL INSIGHTS

The global market scope is classified across five regions: North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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Asia Pacific holds the highest share and is expected to grow at the highest CAGR during the study period due to its strong semiconductor manufacturing base and increasing demand for electronics in rapidly developing economies. In addition, the region’s rapid industrialization and rising demand for electronics, driven by expanding consumer markets and technological advancements, contribute significantly to this growth. The increased focus on innovation, investments by companies, and government support further accelerate market expansion in the region. For instance,

• In March 2024, The Indian Government announced that it is set to launch the Bharat Semiconductor Research Centre, a global-standard institution partnering with the private sector, government, academia, and startups. The research facility will be developed through a public-private partnership (PPP) with industry experts and academia, driving the market expansion.


• In May 2024, Shin-Etsu Chemical Co., Ltd. announced that it will create Shin-Etsu Silicone Co., Ltd. in China to build a silicone products plant and expand its business.

North America holds the second-highest share in the market due to its strong presence in semiconductor technology and innovation, with major companies and research institutions based in the U.S. and Canada. The region’s advanced infrastructure, high R&D investments, and substantial demand for semiconductor components in sectors such as consumer electronics, automotive, and defense contribute to its significant market share. For instance,

• In October 2023, Kyocera International, Inc. expanded its semiconductor and microelectronic device assembly capabilities at its San Diego facility, where it has been producing high-performance semiconductor packaging for over 50 years. This expansion addresses the growing U.S. demand for advanced domestic assembly capabilities to support evolving technologies.

The Middle East & Africa semiconductor materials market is expected to grow at the second-highest CAGR during the forecast period owing to increasing investments in technology and infrastructure development in the region. The rise in demand for electronics, driven by expanding sectors such as telecommunications, automotive, and consumer electronics, coupled with government initiatives to boost the technology sector, contributed to this rapid growth.

Europe holds a moderate share of the market due to its established industry, government support, and strong expertise. For instance,

• In November 2023, The European Commission launched the Chips Joint Undertaking (Chips JU) to boost Europe's semiconductor sector. It will bridge research and production, with a first call for USD 1.84 billion in EU funding, matched by Member States for a total of USD 3.63 billion, plus private investment.

However, it faces slower growth compared to Asia Pacific and North America. Despite its significant focus on automotive and industrial applications, competitive pressures and slower adoption of new technologies limit its growth.

South America is expected to grow at the slowest rate during the study period due to its limited semiconductor manufacturing infrastructure and lower technological investment compared to other regions. In addition, slower economic growth and lower demand for advanced electronics in the region contribute to its moderate market expansion.

KEY INDUSTRY PLAYERS

Key Market Players Launch New Products to Strengthen Market Positioning

Players in the market launch new products to enhance their market positioning by leveraging the latest technological advancements, addressing diverse consumer needs, and staying ahead of competitors. They prioritize portfolio enhancement and strategic collaborations, acquisitions, and partnerships to strengthen their product offerings. Such strategic product launches help companies maintain and grow their market share in a rapidly evolving industry.

List of Top Semiconductor Materials Companies:

• Shin-Etsu Chemical Co., Ltd. (Japan)


• Sumco Corporation (Japan)


• Samsung Electronics (South Korea)


• Applied Materials, Inc. (U.S.)


• Amkor Technology, Inc. (U.S.)


• JCET Group (China)


• Dow Inc. (U.S.)


• Kyocera Corporation (Japan)


• Tokyo Electron Limited (Japan)


• Rogers Corporation (U.S.)


• BASF SE (Germany)

KEY INDUSTRY DEVELOPMENTS:

• In July 2024, Applied Materials, Inc. unveiled new materials engineering developments aimed at enhancing computer system performance-per-watt by allowing copper wiring to scale down to the 2nm logic node and beyond.


• In April 2024, Shin-Etsu Chemical Co. announced that it will design a new semiconductor lithography materials plant in Japan, making it the company's fourth production base for this business. The new plant will be developed on a 150,000 m² site, with phased investments totaling approximately USD 560 million by 2026. The company’s resources will fully fund the project.


• In March 2024, Toppan Holdings unveiled its plans to construct a semiconductor package substrate plant in Singapore, which is set to begin operations by late 2026, with an estimated initial investment of USD 338 million.


• In December 2023, Tokyo Electron launched the Ulucus G wafer thinning system for 300mm wafer fabrication. This new system integrates TEL's grinding unit with the proven LITHIUS Pro Z platform, enhancing wafer flatness and quality while reducing manual labor. The Ulucus G features single-wafer processing units, including grinding, scrub cleaning, and spin wet etch, allowing precise control over each wafer's quality.


• In October 2023, U.K. startup Space Forge was set to launch its ForgeStar-1 satellite, aiming to produce semiconductor materials in space after their first satellite was lost in a failed launch. The company partnered with Northrop Grumman to supply space-made semiconductor substrates for further development.

REPORT COVERAGE

The market report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product/service types, and leading applications of the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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Report Scope & Segmentation