North America Semiconductor Materials Market Outlook, 2029

The North American semiconductor materials market is one of the critical fields that supply the necessary materials for processing semiconductor devices, considered to be the backbone of modern electronics in the present day. It encompasses an extremely broad array of products: starting from silicon wafers, photoresists, advanced packaging materials, and specialty gases - so, all those materials that have a key role in ensuring efficient and reliable manufacturing of semiconductor components.

While parts of the world are lax in enforcement, both the US and Canada are founded on firm regulatory standards the US Environmental Protection Agency (EPA) and Environment and Climate Change Canada which make rigorous testing and approval procedures a requirement to ensure safety, environmental sustainability, and reliability for semiconductor materials. What this added complexity brings in the form of compliance drives, therefore, is a very high degree of trust in the materials used by North American semiconductor manufacturers. This, in turn, perhaps forces a willingness to adopt innovative materials and technologies that might not otherwise find easy acceptance in less regulated markets.

One finds an established network of suppliers and distributors within the semiconductor marketplace in North America. These players act like a bridge between the producer of the raw material and the semiconductor manufacturer for efficient distribution of raw materials in different geographical regions. Top distributors such as Applied Materials, Lam Research, and Air Products have established relationships with both the producers and manufacturers, allowing procurement without any glitches and ensuring the supply of critical material requirements reaches the end markets on time. This leads to a settled distribution network, which complements the strengths of the North American market cooperating tremendously in effectiveness and responsiveness within the fast-moving environment of semiconductors.

According to the report, the North American semiconductor materials market is anticipated to grow at more than 5.84% CAGR from 2024 to 2029. The COVID-19 pandemic hit the North American semiconductor material market hard. Right after the outbreak, there was a sudden surge in demand for PPE and associated electronic devices for remote learning, which put pressure on the supply chain and resulted in a short supply of semiconductor components. Manufacturers had to ramp up production lines fast due to such high demand, and often refocus resources away from other product segments. It, posed an opportunity to pace up innovation in the semiconductor materials market.

The need for remote patient monitoring devices and telehealth solutions boosted the demand for advanced semiconductor materials used in portable vital sign monitors and wireless communication devices in healthcare. Increased awareness of hygiene and infection control through the use of disposable medical apparatus and single-use gear has driven the demands for semiconductor materials in the market. A characteristic that makes the North American market outstanding is centrality to institutions of R&D.

The target market needs to be oriented towards the provision of advanced materials for the experimental and prototype phases in semiconductor corporations. For instance, high-purity materials and advanced compounds to make next-generation semiconductors, such as advanced logic chips and high-efficiency power electronics, have huge demands. This need thus fuels North American manufacturers to take part in the development of high-performance materials - the quest for pure, consistent feedstocks that are compatible with advanced fabrication processing.

Market Drivers

• Strong R&D Ecosystem: North America, particularly the United States, has a robust research and development ecosystem characterized by world-leading universities, research institutions, and tech companies. This strong foundation supports continuous innovation in semiconductor materials. For example, silicon carbide (SiC) and gallium nitride (GaN) are gaining traction for their superior properties in high-power and high-frequency applications, driven by intensive R&D activities in the region.
• Government Support and Policies: North America benefits from significant government support, exemplified by the U.S. CHIPS Act, which allocates substantial funding to bolster domestic semiconductor manufacturing and research. These policies aim to reduce dependency on foreign suppliers, enhance national security, and create high-tech jobs. Government incentives for R&D and manufacturing, combined with strategic partnerships between the public and private sectors, provide a favorable environment for the growth of the semiconductor materials market.

Market Challenges

• High Manufacturing Costs: North America faces high manufacturing costs due to stringent environmental regulations, high labor costs, and complex compliance requirements. These factors can deter investments in large-scale semiconductor materials production. Companies often need to navigate a complicated landscape of regulatory standards while maintaining competitive pricing. This dynamic pushes firms to innovate in cost-effective manufacturing techniques or consider outsourcing some production aspects to regions with lower operational costs.
• Skilled Workforce Shortage: The semiconductor industry in North America is experiencing a shortage of skilled professionals, particularly in materials science and engineering. This talent gap hampers innovation and the ability to scale operations effectively. The industry requires highly specialized skills for the development and manufacturing of advanced semiconductor materials. Efforts to bridge this gap include collaborations with educational institutions to enhance STEM education and workforce training programs.

Market Trends

• Focus on Advanced Packaging Technologies:There is a growing focus on advanced packaging technologies such as 3D integration, system-in-package (SiP), and chiplet designs in North America. These technologies require innovative materials to improve performance and power efficiency. Advanced packaging is crucial for the development of high-performance computing, mobile devices, and other applications requiring miniaturization and enhanced functionality. This trend drives demand for high-purity materials and new substrates that can meet the rigorous requirements of next-generation packaging technologies.

Fabrication leads in the North American semiconductor materials market, attributed to a highly developed manufacturing infrastructure, huge investments in R&D, and friendly government policies.

North America is leading in semiconductor fabrication due to its advanced infrastructure for manufacturing, which places it at the forefront, having some of the world's most advanced fabrication facilities - fabs - operated by leading players such as Intel, GlobalFoundries, and Texas Instruments. The fabs become equipped with state-of-the-art technologies that enable the manufacture of very sophisticated semiconductor materials, be it for consumer electronics or even those used in the aerospace and defense industries. Heavy investment in research and development cements the region's leading role in the field of fabrication.

Strong academic collaboration with the industry exists in universities and research centers throughout North America for inventing new and improving existing fabrication processes in existence in order to improve efficiency and performance. It is worth noting the investment of the U.S. government in supporting the industry, specifically with policies and funding initiatives that establish increased domestic production of semiconductors. Such measures, for instance, the massive funding through the CHIPS Act, are underlined for new fabs to develop, advancing R&D efforts, and increasing supply chain resilience. The measures mean to decrease dependence on foreign imports of semiconductors and, through the coming decades, when North America should continue to be the leader in technological innovation and production capacity. This underpins a strong industrial capability with extensive academic research, accompanied by government interventions, which help to build a strong ecosystem at the core of regional leadership in semiconductor fabrication.

The consumer electronics segment in the North American semiconductor materials market is due to large demand for advanced, feature-rich devices, and the presence of a huge number of leading semiconductor manufacturers and technology companies driving innovation and turning in cutting-edge semiconductor solutions.

High-end technology companies or semiconductor manufacturers, like Intel, Qualcomm, and Texas Instruments, are headquartered in North America, particularly in the US. Innovation by player companies in semiconductor solutions for the emerging demand of advanced consumer electronic goods makes this region continuously invest in R&D for the development of new semiconductor materials. Innovations in semiconductors increase the demand for semiconductors. It is the rising demand from North America for feature-rich, high-performance electronic devices that continues to present an increasing scope for evermore sophisticated semiconductor components.

It boosts the semiconductor materials market for small-sized, highly efficient, and powerful chips that can provide better performance boosts. Key technology companies exist in as much as high demand exists for advanced devices, hence driving consumer electronics segment growth in the semiconductor material market in North America. The growing artificial intelligence and machine learning applications and development of next-generation wireless communication technologies are expected to further drive the consumer electronics segment of the semiconductor materials market in North America. AI and ML have made their way into many consumer electronics, such as smart speakers, smartphones, and wearables, in attempts to enhance user experience and drive innovation. Growing AI and ML capabilities being pushed into consumer devices raise the demand for high-power and efficient semiconductor components, thus acting as a driver for the North American semiconductor materials market.

The leadership of the United States in the semiconductor materials market is due to equipping themselves with a very strong base of research, development, and innovation, properly supported by huge investments from the private sector and government alike.

Due to the credence in innovation and technological advancement since ages ago, the United States has been very much the pioneer and global leader in the semiconductor materials market. The land is inhabited by a number of leading semiconductor firms such as Intel, Texas Instruments, and Qualcomm that invest billions of dollars annually in R&D relating to modern semiconductor materials, designs, and fabrication processes. Other than private sector investment, the U.S. is highlighted to have an extremely vital role in supporting research and innovation in semiconductor materials through funding and public-private collaboration.

Federal agencies like NSF, DOE, and DARPA account for a large portion of funds toward semiconductor research and development projects. It has an extremely large network of world-class universities and research institutions located within its borders, such as MIT, Stanford, UC Berkeley, among others, which are leading in semiconductor material research and innovations. These institutions build a talent pool of skilled workers and generate intellectual property that fuels the growth of the U.S. semiconductor materials market. The country has a very perfect technology infrastructure in place and a very conducive business environment that allows entrepreneurship and inventiveness to bloom.

This provides the necessary ecosystem for the growth of startups and small businesses that are involved in semiconductor materials and technology-related activities, thus further enhancing the position of the U.S. in the global market. The increasing demand for electronic applications, such as automotive, telecommunications, defense, and consumer electronics, is fuelling the requirement for innovative semiconductor materials and solutions. With a sound fundamental grasp of research, development, and innovation, the United States stands prepared and waiting to squeeze the greatest benefit from these opportunities that keep it at the top in the Semiconductor Materials Market.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Semiconductor Materials market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Application:

• Fabrication
• Packaging

By End-User:

• Consumer Electronics
• Telecommunication
• Manufacturing
• Automotive
• Energy and Utility
• Others

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Semiconductor Materials industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.