Advanced Semiconductor Materials Market Report Insights

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The Advanced Semiconductor Materials Market Size was valued at USD 50.55 Billion in 2023 and is expected to reach USD 140.38 Billion by 2032 and grow at a CAGR of 12.1% over the forecast period 2024-2032.

Semiconductor materials serve at the very core of the electronics industry in the form of constituent materials used in making integrated circuits, transistors, sensors, and power devices. Advanced materials, including compound semiconductors, two-dimensional materials, nanomaterials, and organic semiconductors, are bridging the gap toward the fabrication of the next generations of electronic devices to achieve faster, more energy-efficient, and miniaturized devices.

The Advanced Semiconductor Materials Market is driven by increasing investments by top global technology companies in research and development. The top 2,500 firms spent more than USD 1.41 trillion in R&D alone in 2022. Companies in the ICT sector primarily led the trend, which includes semiconductor research. The spending by U.S. companies on R&D alone tallied more than USD 543 billion in one year, proving that the nation not only wishes to advance its semiconductor technologies but also appreciates innovations in semiconductors and other areas. China witnessed a growth of 16.4% in R&D expenditure, showing much focus on innovation in semiconductors and related areas. The massive injection of R&D funds is shooting developments on compound semiconductors, two-dimensional materials, and nanomaterials, among others, making electronics more efficient and powerful. As the ICT hardware manufacturers - Samsung and ASML in particular huge investments in R&D, their investments are directly influencing the development of semiconductor technologies required for the next generation of high-performance electronics.

Advanced Semiconductor Materials Market Dynamics

KEY DRIVERS:

• Surging Demand for High-Performance Electronics Drives Growth in Advanced Semiconductor Materials Market

Advanced semiconductor materials market are very significant, driven by the surging demand for faster, more efficient, and miniaturized electronics in consumer electronics, automotive, and telecommunications, especially with the advent of 5G technology. Most of these growths are channelled through advanced technologies like AI, the Internet of Things, and 5G connectivity, all of which require generating high-performance chips requiring sophisticated semiconductor materials.

The demand for high-end semiconductors here is significant because EVs require them almost exclusively for battery management and autonomous driving systems among other infotainment technologies. In addition, the growing demand for smart devices embedding connectivity further calls for high-performance electronics. The compound semiconductor, including gallium nitride and silicon carbide, has really become a rapidly growing industry, because of its superior performance in power electronics, memory storage, and optoelectronics.

• Driving Innovation: The Impact of R&D Investments on Next-Generation Semiconductor Technologies

The development of two-dimensional materials, nanomaterials, and organic semiconductors finds its driving force in the investments made by top tech players and governments in their research and development. These doles would always prove to be of highly significant value in developing novel applications such as flexible electronics, quantum computing, and AI-driven devices, all of which would demand an even further advancement of semiconductor technology.".

The main drivers of the Advanced Semiconductor Materials Market are a large investment in R&D and an increasingly larger talent pool in the semiconductor industry. Also, the semiconductor market is anticipated to reach USD 1 trillion by 2030, due to increases in flexible electronics, quantum computing, and other AI-driven devices that require semiconductors of increased complexity. Compound semiconductors would also be on the rise in demand.

RESTRAIN:

• The Impact of Supply Chain Disruptions on the Advanced Semiconductor Materials Market

Semiconductors are especially vulnerable to supply chain disruption due to geopolitical and health concerns like natural disasters, and global pandemics. These disturbances may result in shortages of raw materials and production delays impeding the growth & stability of the Advanced Semiconductor Materials Market.

Since the global event a few years ago, supply chain issues have plagued The Advanced Semiconductor Materials Market. A June 2024 report found that around 80% of manufacturers had experienced material shortages affecting production schedules. As of now, the automotive industry-wide issue results in an estimated 6-month delay for semiconductor component production. In addition, a survey conducted in December 2023 demonstrated that raw material availability is one of the most important constraints affecting operational efficiency according to 45% of semiconductor companies. Moreover, these same disruptions have caused a 20% extension of lead times for essential materials including silicon and gallium nitride in the global semiconductor market. These factors interact in a way that reflects vulnerabilities within the Advanced Semiconductor Materials Market and illustrates how supply chain management improvements as well as risk diversification methods are crucial going forward.

Advanced Semiconductor Materials Market Segment Analysis

BY MATERIAL TYPE

In 2023, The Compound Semiconductors segment was the largest revenue Market share, holding 35% in the forecasted period, thus emphasizing its basic role in driving the growth of the industry. Compound semiconductors include gallium nitride, or GaN, and silicon carbide, or SiC, which represent a critical element of applications focused on power electronics, RF communications, and optoelectronics. Infineon Technologies introduced power devices based on SiC that improve energy consumption efficiency in electric vehicles and renewable energy systems. Qorvo further advanced GaN technologies for 5G infrastructure, that allow networks to have faster communication with much greater efficiency. Developments in compound semiconductor technology should continue to enable new device creations, such as new high-performance transistors and power converters.

The Two-Dimensional Materials segment is expected to grow with the highest CAGR at 14.08% over the forecast period in the Advanced Semiconductor Materials Market. These materials, encompassing graphene, and transition metal dichalcogenides (TMDs), among many other layered substances, possess particularly remarkable electrical, thermal, and mechanical properties. Companies like IBM have been developing graphene-based transistors for performance gains that could increase the speed and efficiency of electronic devices many times over.

BY APPLICATION TYPE

In 2023, the Memory and Storage segment dominated the market with a strong revenue share of 29.7%. This segment is reporting growth mainly driven by high-capacity, high-speed memory solutions necessary for applications in consumer electronics, data centres, and cloud computing. Advanced DRAM and NAND flash memory technologies to date increase the data processing speed and enhance the storage efficiency significantly enough. These are available at companies like Samsung Electronics to support the rising data requirements of modern applications.

The Power Electronics segment is projected to grow at the largest compound annual growth rate (CAGR) of 14.24% during the forecast period, High-energy applications are becoming the most important in the Advanced Semiconductor Materials Market. The growth factors are primarily cost-effectiveness for energy efficiency solutions across all sectors, especially within the renewable energy, EVs, and industrial automation domains. Leaders such as Infineon Technologies, which reported revenues of over USD 10.84 billion in 2023, have been at the forefront with the release of state-of-the-art silicon carbide (SiC) and gallium nitride (GaN) power devices that bring outstanding efficiency and thermal performance to wide power conversion applications.

Advanced Semiconductor Materials Market Regional Analysis

Asia Pacific is expected to hold the largest share of advanced materials for the semiconductor market during the estimated period, accounting for nearly 35% of the global market share in 2023. The region benefits from its status as a global hub for semiconductor manufacturing: China, Japan, South Korea, and Taiwan house important firms and large foundries. For instance, in 2023, Taiwan Semiconductor Manufacturing Company controlled almost 54% of the foundry market share worldwide, which highlights this region's leadership. In addition, the size of the semiconductor market size in Japan was estimated to be around USD 40 billion in 2023, while Korea's semiconductor export was around 128 billion USD in the year 2023 further strengthening its place in the global supply chain. Such countries have developed substantial ecosystems related to semiconductors through research and development centres, manufacturing, and human resources.

North America is likely to spearhead the highest CAGR growth throughout the forecast period for advanced materials for the semiconductor market, which is expected to grow at an approximate rate of 14.13% in the range from 2024 to 2032. Several vital factors contribute to such fast growth of the semiconductor business within the region. North America houses the largest number of premier semiconductor companies. Companies such as Intel and NVIDIA raked in USD 63 billion and USD 26 billion respectively for 2023. It also accommodates leading research institutions such as MIT and Stanford University, which accelerate the continuous development of semiconductor materials. According to the Semiconductor Industry Association, sales of semiconductors in 2023 reached a total of USD 150 billion, hence pointing out how robust the industry has been and continues.

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Key Players in Advanced Semiconductor Materials Market

Some of the major players in the Advanced Semiconductor Materials Market are:

• WOLFSPEED, INC. (Silicon Carbide Power Devices, GaN Power Devices)

• Coherent Corp. (Laser Systems, Metrology Systems)

• Sumitomo Electric Industries Ltd. (Copper Foil, Optical Fibers)

• Nichia Corporation (LEDs, Laser Diodes)

• Soitec (SOI Wafers, GaN-on-Si Wafers)

• AXT, Inc. (Sapphire Substrates, Silicon Carbide Substrates)

• ENTEGRIS (Process Gas Handling Systems, CMP Consumables)

• Samsung Electronics Co., Ltd. (Memory Chips, System-on-Chips (SoCs))

• IQE PLC (Epitaxial Materials, LED Epiwafers)

• Applied Materials (Etch Systems, Deposition Systems)

• LG Chem Ltd. (Battery Materials, Electronic Materials)

• Resonac Holdings Corporation (Photoresists, Electronic Chemicals)

• BASF SE (Electronic Chemicals, Polymer Materials)

• KYOCERA Corporation (Ceramic Packages, Cutting Tools)

• Dow Chemical Company (Electronic Materials, Semiconductor Chemicals)

• 3M Company (Abrasives, Adhesives)

• Air Liquide (Process Gases, Gas Equipment)

• Veeco Instruments Inc. (MOCVD Systems, Plasma Etching Systems)

• Evonik Industries (Electronic Chemicals, Polymer Materials)

• Tokyo Electron Ltd. (Lithography Systems, Etch Systems)

SUPPLIERS

• Linde

• Air Products

• Praxair

• Sumco

• Shin-Etsu Chemical

• Elga

• Fujifilm

• Merck

• Toray

• DuPont

RECENT TRENDS

• In January 2024, Fujifilm announced a USD 39 billion investment to boost advanced semiconductor material production. This move aims to expand manufacturing capabilities, develop new technologies, and meet the growing global demand for high-performance semiconductor solutions.

• In 2024, Resonac Corporation introduced "US-JOINT," a Silicon Valley-based R&D consortium with ten American and Japanese semiconductor materials and equipment partners, including KLA, Kulicke & Soffa, and NAMICS.