Market Trends of Semiconductor Laser Equipment Industry
This section covers the major market trends shaping the Semiconductor Laser Equipment Market according to our research experts:
Increasing Demand for Semiconductor Chips To Support The Market Growth
- The rising demand for semiconductor chips throughout various end-user sectors creates a favorable market setting for the semiconductor laser equipment market's growth. For example, according to IEEE, semiconductor demand in the automotive sector has been continuous, owing to a significant improvement in cutting-edge technologies such as vehicle-to-everything communication, advanced driver-assistance systems (ADAS), and power management in electric cars, including navigation, dashboard cameras, smart keys, as well as a highly anticipated image processor.
- According to the China Association of Automobile Manufacturers (CAAM), the total number of automobiles manufactured in China in 2021 was around 26.1 million. Furthermore, the automobile sector is expected to increase steadily in 2022. For example, in September 2022, the country sold around 2.6 million automobiles. The growth in the automobile sector is expected to increase demand for automotive-grade semiconductor chips, driving investments in semiconductor equipment such as semiconductor lasers.
- Growth in the consumer electronics industry is also expected to contribute to the demand for semiconductor chips over the forecast period as a result of the increasing demand for smart and multifunctional devices. This demand growth is encouraging vendors to expand their operations and invest in new manufacturing facilities. For instance, in July 2022, Samsung revealed plans to invest USD 500 million to increase the manufacture of household appliances at its two plants in Mexico. Such investments are expected to propel semiconductor chip demand, contributing to the market's growth.
- Driven by an increasing demand for semiconductor chips, manufacturers are increasing their investments in new chip manufacturing facilities and equipment, creating a favorable market scenario for the studied market. For instance, according to SEMI, semiconductor manufacturing equipment spending increased from USD 64.42 billion in 2018 to USD 102.64 billion in 2021.
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Asia Pacific is Expected to Grow Significantly Over the Forecast Period
- Asia-Pacific is expected to grow considerably throughout the forecast period due to increased government expenditures and efforts coupled with the region's high production and industrialization, increasing the demand for semiconductors. Also, strong growth in the communications sector in countries like India, China, Japan, Korea, and Taiwan, among others, and the presence of major smartphone manufacturers across the region are expected to create growth opportunities in the region over the next few years.
- Increasing investments by major players and rising government initiatives in end-uses are expected to boost product demand over the coming years. For example, Kyocera plans to spend twice as much on semiconductor manufacturing and other industries as it did in the three years before December 2022. This will bring total spending on capital expenditures, research and technology to JPY 1.3 trillion (USD 9.78 billion) during the three fiscal years until March 2026.
- Similarly, in November 2021, the Japanese government unveiled its plans to allocate JPY 600 billion (USD 4.5 billion) of its fiscal 2021 supplementary budget to help fund advanced semiconductor manufacturing. In 2021, the Japanese government approved a USD 338 million chip research project where TSMC could develop new chip technology. The company, along with rivals like Intel and Samsung, is taking advantage of generous state subsidies as nations face the current chip shortage and concerns about domestic supplies in the future. Over the next few years, the semiconductor laser equipment market is expected to grow because of changes in how semiconductors are made.
- Furthermore, the Asia-Pacific region is also home to some of the biggest semiconductor chip manufacturers, such as TSMC, SMIC, SK Hynix, etc. These vendors are spending a lot of money on semiconductor equipment to increase production at their existing plants and move into new markets. This is creating a good market situation for the growth of the studied market in the Asia-Pacific region.
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