TECHCET—the electronic materials advisory firm providing market and supply-chain information – announced that the Total Semiconductor Materials market is forecasted to rebound with almost 7% growth in 2024 to reach US$74 billion. This upwards turnaround comes after a contraction of -3.3% in 2023 due to the overall semiconductor industry slowdown and decline in wafer starts. Looking ahead, the total semiconductor materials market is expected to grow at over a 5% CAGR from 2023 through 2027. By 2027, TECHCET anticipates the market to reach US$87 billion or more, with new global fab ramps contributing to a potentially higher market size.
Although the 2023 slowdown has eased supply constraints, tightness in supply is expected to resume in 2024 for 300 mm wafers, epitaxial wafers, some specialty gases, and perhaps copper alloy targets with the ramp of new fabs globally. The degree of supply tightening will be a function of material supplier expansion delays.
Strong demand growth could strain supply chains if material/chemical production capacity do not keep pace with fab expansions. TECHCET has been tracking high-purity chemical production availability in the US, and has identified several areas where imports will be necessary to support demand.
In addition to the global fab expansion, new device technologies will drive materials market growth as new materials and additional process steps are needed for Gate-All-Around Field Effect Transistors (GAA-FET), 3D DRAM, and 3D NAND as layer count approaches 5xxL. These materials include specialty gases for EPI silicon/silicon germanium, EUV photoresist and developers, CVD and ALD precursors, CMP consumables and cleaning chemicals (including highly selective nitride etch), and more.
Other lingering supply chain constraints and potential chokepoints could also cause issues as fabs expand capacity. For example, geopolitical issues between China and the US are beginning to strain germanium and gallium supply chains, while risks with rare earths supply are heightening due to China’s major stake on these materials.
Another concern in the US is on regulatory issues potentially limiting material supply expansions. Permitting around regulations can add time and costs to expansion projects. Additionally, government regulations for EHS hazards may regulate PFAS materials out of existence, forcing material suppliers to develop alternative replacements that will take time to develop and qualify.
