Semiconductor Raw Materials Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Semiconductor Materials Market Analysis

The Semiconductor Materials Market size is estimated at USD 77.13 billion in 2024, and is expected to reach USD 97.28 billion by 2029, growing at a CAGR of 4.75% during the forecast period (2024-2029).

Semiconductor materials represent one of the significant innovations in the electronics industry. By using materials such as silicon (Si), germanium (Ge), and gallium arsenide (GaAs), electronics manufacturers can replace traditional thermionic devices that make electronic devices heavy and expensive. Since the introduction of semiconductor devices, advanced miniaturization has progressed, and electronic devices have become more compact and mobile.

• With the miniaturization trend gaining momentum in the semiconductor industry, the demand for semiconductor materials is also expected to grow as manufacturing advanced node ICs, heterogeneous integration, and 3D memory architectures require more processing steps. This would also drive higher wafer fabrication and packaging materials consumption.
• Although significant chip manufacturing companies in South Korea, such as Samsung and SK Hynix, are seeking to bolster supply chain stability, the South Korean government is investing in the domestic production of semiconductor materials and equipment to source about 50% of its materials, components, and equipment demand locally by 2030.
• Semiconductors are moving away from rigid substrates to more flexible plastic material and paper, all due to new material and fabrication discoveries. The trend toward more flexible substrates has led to numerous devices, from light-emitting diodes to solar cells and transistors. Further, the increasing production of consumer electronics devices and demand from the industrial sector for IoT and automation devices, owing to the policies of Industry 4.0, are some of the significant factors that govern the increasing demand for semiconductor materials in the global market.
• The market’s growth is driven by the growing proliferation of smartphones and the high penetration of 5G mobile networks worldwide. The increasing adoption of smart technologies in mobile phones and the rapid introduction of next-generation mobile communications standards, like LTE or 5G, are factors driving the demand for semiconductor materials. According to 5G Americas, as of 2023, there were an estimated 1.9 billion fifth-generation (5G) subscriptions worldwide. This figure is expected to increase to 2.8 billion by 2024 and 5.9 billion by 2027.
• Several companies in the market are focusing on strategic partnerships, collaborations, and developing new products or incorporating new features in the existing products to cater to the complex needs of the end users, expand their market share, and generate revenue from different regions. For instance, in September 2023, Mitsubishi Chemical announced the construction of a new semiconductor materials plant, aiming to become operational by March 2025 as the global competition in semiconductor manufacturing intensifies.
• The semiconductor industry is one of the most complex because of the several (more than 500) processing steps involved in manufacturing different products and the challenging environment faced by workers, including volatile electronics industries and unpredictable demand. Depending on the complexity of the manufacturing process, there can be up to 1,400 process steps in semiconductor wafer manufacturing alone. Transistors are formed on the bottom layer, and the process is repeated as many circuits are assembled to create the final product.
• The Russia-Ukraine War is impacting the supply chain of semiconductors, and it is a significant supplier of raw materials for producing semiconductors and electronic components, including various equipment. The war disrupted the supply chain, causing shortages and price increases for these materials, impacting manufacturers and potentially leading to higher costs for end users. Also, in the first quarter of 2023, the mobile phone industry witnessed a decline in shipments compared to the previous year due to geopolitical tensions and decreased consumer spending, which also affected the market's growth. Similarly, the US-China conflict created new challenges for the global semiconductor supply chain; it may hamper market growth in the coming years.

Semiconductor Materials Market Trends

Consumer Electronics to Hold Significant Market Share

Semiconductor Materials Industry Segmentation

Semiconductors are silicon-based materials that conduct electricity better than insulators like glass, but they are not pure conductors like copper or aluminum. Materials used to pattern the wafer are considered fabrication materials for the scope of the study. In contrast, the materials used to protect or connect the die are called packing materials. Semiconductor fabrication is a set of operations that involves depositing a sequence of layers onto a substrate, most often silicon, to create a device structure. Various thin film layers are deposited and removed in this process. Photolithography regulates the portions of the thin film that are to be deposited or withdrawn. Cleaning and inspection stages are usually performed after each deposition and removal operation. 

The semiconductor materials market is segmented by application (fabrication (process chemicals, photomasks, electronic gases, photoresists ancillaries, sputtering targets, silicon, and other fabrication materials) and packaging (substrates, lead frames, ceramic packages, bonding wire, encapsulation resins (liquid), die attach materials, and other packaging applications), end-user industry (consumer electronics, telecommunication, manufacturing, automotive, energy and utility, and other end-user industries), and geography (Taiwan, South Korea, China, Japan, North America, Europe, and Rest of the World). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.