Market Trends of Semiconductor Bonding Equipment Industry
Power IC and Power Discrete Application Segment Holds Significant Market Share
- Power semiconductor devices facilitate efficient power management, conversion, and control across various applications. The increasing focus on energy conservation and power consumption is increasing the significance of power semiconductor devices. The market is supported by reduced losses, enhanced controllability, greater durability, and reliable performance in standard and fault conditions. As the demand for power semiconductors continues to rise, there is also an expected increase in the market for power ICs and bonding technology.
- The segment's growth is driven by the rapid digitization of industries and the increasing number of connected devices. These devices necessitate efficient power management and high-performance power semiconductor devices. By utilizing these devices, optimal power conversion is achieved, energy losses are reduced, and the overall energy efficiency of electronic systems is enhanced.
- The segment is experiencing growth due to the rising demand for high-energy and power-efficient devices. This demand is further fueled by the prevalence of wireless and portable electronic products, the automotive industry's shift toward electrification, and the increased use of these devices.
- The industry has a rising inclination toward power modules and integrated solutions. Manufacturers of power semiconductors are creating compact, highly integrated modules that merge various power components like switches, diodes, and drivers to streamline system design, lower component quantity, and improve overall system efficiency. Power semiconductor firms stand to gain by understanding the obstacles and market trends early in the product design process to remain competitive. The increasing investments by vendors to boost power semiconductor production are anticipated to affect the market's expansion.
- A significant development in power IC and discrete components enhances power management efficiency. Recent advancements in system architectures have led to more efficient AC-DC power adapters with reduced size and component numbers. Introducing new Power-over-Ethernet (PoE) standards has enabled higher power transfer capabilities, facilitating the creation of innovative device categories like connected lighting. The growing emphasis on minimizing electricity consumption by electronics manufacturers and the increasing demand from consumer electronics are the primary drivers behind the necessity for Power ICs. These factors could potentially boost the demand for bonding equipment.
- There is a significant rise in smartphone transmission speeds, necessitating battery modules to accommodate the processing requirements. Power adapters are now incorporating discrete semiconductors, leading to an anticipated surge in demand driven by the increasing sales of battery-powered devices. The growth of IoT applications is projected to propel the demand for discrete semiconductors further.
- For example, according to Ericsson, global cellular IoT connections reached 1.9 billion in 2022 and are estimated to reach 5.5 billion by 2027. The increasing penetration of smartphones with the evolution of 5G is expected to drive the market's growth.
- Similarly, the market's growth is expected to be positively influenced by the significant technological advancements in IoT applications, which aim to provide technologically enhanced linked devices to consumers worldwide. The expansion of IoT applications has increased the prevalence of smart devices and small semiconductors, consequently driving the demand for advanced semiconductor bonding equipment.
- Ericsson stated that the number of connected devices globally will nearly double from 2022 to 2028, primarily due to the rise in short-range IoT devices. It is expected that there will be approximately 28.72 billion such devices by 2028. With the growing demand for these IoT-connected devices, the demand for power ICs is expected to rise, thereby enhancing the growth of the bonding equipment market.
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Asia-Pacific is Expected to be the Fastest Growing Market
- The semiconductor industry has emerged as a critical driver of economic growth in Asia. Its rapid expansion and technological advancements have become an important component of the global supply chain.
- Asia-Pacific holds a major share of semiconductor foundries globally, with the region having the presence of prominent companies like Samsung Electronics, TSMC, etc. South Korea, Taiwan, Japan, and China have significant market shares in the region. Taiwan holds a prominent share of the foundries in the world and is a vital region in the semiconductor value chain. The increasing investments in the expansion of semiconductor manufacturing capacities in the region are expected to aid the market's growth significantly.
- In September 2023, China launched a USD 40 billion fund to boost the semiconductor industry. China plans to establish a state-backed investment fund to narrow the gap with global rivals, especially the United States. This initiative is poised to evolve as the most significant of the trio of funds managed by the China Integrated Circuit Industry Investment Fund, generally known as the Big Fund. President Xi Jinping of China stressed the critical importance of achieving semiconductor self-sufficiency, primarily in response to export control measures imposed by the United States. The latest fund obtained approval from Chinese authorities, with the finance ministry committing CNY 60 billion (USD 8.30 billion).
- Based on its expanding domestic chip demand, China is estimated to overtake the United States as the world's top powerhouse in the semiconductor industry. By 2030, the semiconductor market is expected to double in size to reach more than USD 1 trillion, with China contributing over 60% of that increase, according to the Semiconductor Industry Association. Such exponential growth is anticipated to increase demand for semiconductor bonding equipment.
- The new semiconductor fab would fabricate chips for applications like display drivers, power management IC, microcontrollers, and high-performance computing logic, addressing the growing demand in markets like computing and data storage, automotive, wireless communication, and artificial intelligence. This fab claims to have a manufacturing capacity of up to 50,000 wafers per month, and the first chip will come out of the facility before the end of 2026.
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