Semiconductor Materials Market - Forecasts from 2023 to 2028

The semiconductor materials market is projected to grow at a CAGR of 3.29% to reach US$70.18 billion in 2028 from US$55.941 billion in 2021.

Semiconductor materials are substances that exhibit electrical conductivity levels falling between those of conductors (such as copper) and insulators (such as glass). They possess a distinctive characteristic whereby their conductivity can be easily manipulated by the introduction of impurities or dopants, which alter their electronic properties. This property makes them ideal for use in electronic devices like transistors, diodes, and solar cells. Several factors contribute to the growth of the semiconductor materials market, including the expansion of the electronics industry, technological advancements, rising demand for renewable energy, as well as the burgeoning automotive and medical sectors, among others.

The growth of the semiconductor materials market is closely linked to the expanding automotive industry.

Automotive manufacturers have been incorporating more and more electronic components into their vehicles. These components require semiconductor materials, such as microcontrollers, sensors, and power devices, to function properly. As a result, the demand for semiconductor materials in the automotive industry has increased significantly. Therefore, the growth of the automotive industry is a key driver of the semiconductor materials market. For instance, data from The International Organization of Motor Vehicle Manufacturers indicates that the global production of vehicles increased by 3% in 2021 as compared to 2020. As per the same source, global sales of all vehicles increased from 78,774,320 in 2020 to 82,684,788 in 2021. OICA data also indicates that the total number of vehicles produced in the United States of America was around 9167214 representing an increase of 4% in 2021 as compared to 2020.

The National Automobile Dealers Association states that vehicle sales in the United States rose by 4.2% (15.4 million units) in 2023 as compared to 2022. According to VDA - German Association of the Automotive Industry, vehicle production in Germany was recorded at 2,27,400 units in 2022. The Federal Motor Transport Authority Germany stated that the number of new car registrations in the country rose to 3,14,318 units in 2022. Data from The International Trade Administration states that around 797,243 vehicles were produced in Italy in 2021 representing an increase of 2.6% as compared to 2020. Thus, it can be concluded that the rising rate of both production and sales of vehicles globally will drive the demand for semiconductor materials proving to be beneficial for the growth of this market.

Asia Pacific is anticipated to exhibit excellent growth potential in the semiconductor materials market over the forecasted period.

The growth of the semiconductor materials market is driven by the strong growth of the electronics and automotive industries in the region. For instance, data from the Ministry of Electronics and Information Technology states that India’s electronics manufacturing industry was valued at US$ 74.7 billion in 2020. According to the same source, India can achieve over US$ 300 billion in electronics manufacturing and exports by 2025. Similarly, data from Japan’s Ministry of Economy, Trade and Industry indicates that in 2020, the country produced around 29,362 million yen worth of consumer electronic equipment. Also, data from OICA shows that there was a 3% increase in the production of commercial vehicles in China in 2021 and around a 24% increase in India in the same year. Additionally, the medical industry uses semiconductor materials for various applications owing to their distinctive optical and electrical characteristics. Medical lasers are one such application wherein semiconductor materials are utilized to cater to diverse requirements, including but not limited to, skin resurfacing, hair removal, and ophthalmology.

Increased initiatives and investments in the development of medical lasers are poised to propel the demand for semiconductor materials in this region. For instance, in May 2022, in a bid to provide patients in the eastern Australian seaboard with better access to leading specialists, state-of-the-art technology, and top-quality treatment options at convenient locations, SMS Healthcare invested in LaserSight, an Australian network of clinics that specializes in laser refractive eye surgery. The investment was aimed at ensuring the best possible outcomes for patients. Similarly, in September 2020, The Ministry of Health, Labour, and Welfare in Japan granted marketing approval to Rakuten Medical Japan for its Akalux IV Infusion 250mg and BioBlade Laser System. The approval was for the use of these products in locoregional cancer treatment. Moreover, semiconductor materials are also used in the production of sensors that are used in communication devices such as accelerometers and gyroscopes, which enable motion sensing and navigation features in smartphones and other devices.

The growing production of smartphones in this region is expected to drive the demand for semiconductor materials. For instance, according to the India Cellular and Electronics Association (ICEA), the total value of mobile phone manufacturing in 2022 was almost Rs 85,000 crore, representing a 30% increase compared to 2021. Thus, the combination of these factors is expected to drive demand for semiconductor materials in the Asia Pacific region.

Market Developments:

• In December 2022, DuPont introduced the CYCLOTENE Dry-Film Photo-Imageable Dielectric Material to improve advanced semiconductor packaging for high-performance applications such as 5G and AI.
• In October 2020, CAPLINQ finalized a distribution agreement with Hysol in Europe and the Americas and served as a representative for Hysol's Epoxy Molding Compounds (EMC), with a particular emphasis on the semiconductor-grade epoxy mold compounds that were utilized in packaging integrated circuits (IC), discrete components, and capacitors.

Market Segmentation:

By Type

• Fabrication
• Packaging

By Material

• Silicon
• Germanium
• Selenium
• Others

By End-Users

• Automotives
• Consumer Electronics
• Medical
• Communications
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• UK
• Germany
• France
• Italy
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Others
• Asia Pacific
• China
• Japan
• India
• Taiwan
• South Korea
• Others