Electronics and Semiconductor Manufacturing Poised for Big Gains in Coming Years

The electronics and semiconductor manufacturing landscape is expected to grow by leaps and bounds, and even despite the challenges faced due to COVID-19 and and Ukraine crisis, it doesn’t appear to be slowing.

For example, according to recent data from SEMI, an industry association representing the global electronics product design and manufacturing supply chain, global sales of semiconductor manufacturing equipment surged 44% to an all-time record of $102.6 billion from $71.2 billion in 2020. On one hand, such gains are not surprising given the introduction of 5G and the escalating demand for new technologies in nearly every market sector from manufacturing to consumer electronics. However, historically investments into such technologies typically take time to fully implement, often years. This implies that as rapid the increase has already been, it has not peaked.

“The 44% increase in manufacturing equipment spending in 2021 highlights the global semiconductor industry’s aggressive push to add capacity,” said Ajit Manocha, SEMI president and CEO, in a statement. “This drive to expand production capabilities extends beyond the current supply imbalance, as the industry continues to ramp up to address a wide range of emerging high-tech applications that will enable a smarter digital world with countless social benefits.”
China was cited as the largest market for semiconductor equipment, expiring a 58% annual increase in growth for 2021, while Korea saw semiconductor equipment sales increasing 55% and Taiwan 45%. Even the West, which has made recent shifts to support their own domestic manufacturing initiatives, experienced growth, with Europe seeing a 23% increase and the U.S. a 17% increase.

Even wafer production, which is critical to ASIC production but necessitates highly specialized and costly storage equipment, saw gains. Sales of wafer processing equipment rose 44% percent in 2021. Additionally, packaging equipment sales increased 87%, and test equipment sales rose 30%.

Taken together, these trends all indicate that electronics and semiconductor manufacturing plants are taking seriously the need to expand, innovate, and embrace the new technologies available in the marketplace. Inherently, this environment will favor the largest manufacturers, who can afford such investments. Small to mid-size manufacturers, however, may have to consider alternative solutions in order to maintain pace — or risk being overtaken. Third-party partners, for example, are ideal for adding additional innovations to any manufacturing supply chain, such as last time buy and storage strategies, without the need for upfront capital investment.