Semiconductor materials market to rebound next year

TECHCET, an electronic materials consulting company that provides market and supply chain information, announced that the entire semiconductor materials market is expected to rebound in 2024, growing by nearly 7% to reach $74 billion. This upward shift follows a -3.3% contraction in 2023 due to a slowdown in the overall semiconductor industry and lower wafer starts. Looking ahead, the overall semiconductor materials market is expected to grow at a CAGR of over 5% from 2023 to 2027. By 2027, TECHCET expects the market to reach $87 billion or more, with new global fab expansions contributing to the potentially larger market size.

Although the economic slowdown in 2023 eases supply constraints, tight supplies of 300mm wafers, epitaxial wafers, some specialty gases, and copper alloy targets are expected to recover in 2024 as new fabs are added globally. The extent of supply tightness will depend on the expansion delays of material suppliers as a function of expansion.

Strong demand growth could put pressure on the supply chain if materials/chemicals capacity cannot keep pace with fab expansion. TECHCET has been tracking the availability of high-purity chemical production in the United States and has identified several areas where imports are needed to support demand.

In addition to global fab expansion, new device technologies will also drive materials market growth as all-gate field-effect transistors (GAA-FETs), 3D DRAM and 3D NAND require new materials and additional Process step 5xxL. These materials include specialty gases for EPI silicon/silicon germanium, EUV photoresists and developers, CVD and ALD precursors, CMP consumables and cleaning chemistries including highly selective nitride etch.

Other lingering supply chain constraints and potential bottlenecks could also cause problems as fabs expand capacity. For example, geopolitical issues between the United States and China are beginning to put pressure on supply chains for germanium and gallium, while risks to rare earth supply are intensifying due to China's significant position in these materials.

Another concern in the United States is regulatory issues that could limit the expansion of materials supplies. Permits that bypass regulations can add time and cost to an expansion project. Additionally, government regulations targeting EHS hazards may prohibit the presence of PFAS materials, forcing material suppliers to develop alternatives, which will take time to develop and qualify.

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