Global Rapid Diagnostics Market
September 29, 2025
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Key Market Insights:
The global semiconductor manufacturing equipment market was valued at USD 95.2 billion in 2024 and is projected to reach USD 157.6 billion by 2031, growing at a CAGR of 7.4% during the forecast period. The market is witnessing substantial growth due to rising global demand for advanced semiconductors used in 5G devices, electric vehicles (EVs), AI accelerators, and high-performance computing systems. With the shift toward smaller node sizes (below 10nm and 7nm), equipment precision, process control, and yield optimisation are becoming more critical than ever before.
Governments across key regions—including the U.S., South Korea, Japan, and the European Union—are aggressively investing in semiconductor self-reliance, leading to the creation of new fabs and expansion of existing ones. The push for strategic autonomy, especially after global chip shortages during the pandemic, is prompting the localisation of supply chains and accelerating capital expenditures on next-generation semiconductor manufacturing equipment. Asia-Pacific continues to dominate the landscape due to the presence of industry giants like TSMC, Samsung, and SMIC, while North America is seeing rising investments driven by the CHIPS Act.
Latest Trends:
Surge in EUV Lithography and Advanced Node Equipment Investments
One of the most defining trends in the market is the rapid adoption of Extreme Ultraviolet (EUV) lithography systems, particularly for processes below 7nm. Semiconductor manufacturers are heavily investing in EUV tools to meet the precision and miniaturisation demands of AI, HPC, and advanced SoCs. Companies like ASML are at the forefront, with lead times stretching across multiple quarters due to surging demand. Simultaneously, complementary equipment such as atomic layer deposition (ALD), advanced etch tools, and metrology systems are gaining traction to support ultra-fine patterning and defect control at smaller geometries.
Rising Focus on Advanced Packaging and Heterogeneous Integration
With transistor scaling hitting physical limits, chipmakers are increasingly turning to advanced packaging technologies such as 2.5D, 3D stacking, chiplets, and system-in-package (SiP) to enhance performance and energy efficiency. This shift is fuelling demand for back-end equipment such as wafer-level bonding, flip-chip bonders, and fan-out packaging tools. The growing use of heterogeneous integration is transforming the back-end ecosystem into a performance-critical stage of chip production, not just cost optimisation.
Driving Factors:
Expanding Applications Across AI, Automotive, and IoT Ecosystems
The explosion of demand for semiconductors in emerging application areas such as autonomous vehicles, edge AI, smart factories, and IoT devices is a key driver for the manufacturing equipment market. These segments require high-performance, low-power chips manufactured at advanced nodes, pushing equipment vendors to innovate in areas like thermal control, defect detection, and multi-patterning. Additionally, automotive-grade chips demand higher reliability and longevity, leading to the adoption of more rigorous testing and packaging processes.
Strategic Government Initiatives and Fab Expansion Plans
Governments worldwide are implementing policy incentives, subsidies, and tax breaks to strengthen domestic semiconductor manufacturing capabilities. Initiatives such as the U.S. CHIPS Act, EU Chips Act, and South Korea’s K-Semiconductor Strategy are injecting billions into fab construction and localisation of critical equipment. These policies are directly benefiting equipment suppliers as chipmakers ramp up procurement for new facilities. Strategic alliances between national governments and leading foundries are creating multi-year revenue visibility for equipment manufacturers.
Restraining Factor:
High Capital Investment and Technological Complexity Limit Market Entry
One of the primary restraints in this market is the high cost and complexity associated with semiconductor manufacturing equipment development and deployment. Advanced lithography systems, for instance, can exceed USD 150 million per unit, making it difficult for smaller fabs or new entrants to adopt cutting-edge technologies. Moreover, stringent precision, cleanroom requirements, and calibration standards make maintenance and integration highly technical. These challenges limit the accessibility of advanced manufacturing technologies to only a handful of large-scale, well-funded players, thereby restricting broader adoption in emerging economies or mid-sized firms.
By Equipment Type
Front-End Equipment Dominates Due to High Precision and Advanced Node Demand
Front-end equipment accounted for over 60% of the market share in 2024, as it is crucial for wafer processing and requires the most advanced technologies in photolithography, etching, and deposition. Lithography equipment, especially Extreme Ultraviolet (EUV) systems, are among the most capital-intensive tools, primarily used for sub-10nm node manufacturing. Deposition and etching equipment are also growing steadily, driven by demand for high-aspect ratio structures and multi-patterning at smaller geometries.
Meanwhile, back-end equipment—which includes assembly & packaging tools and semiconductor testing systems—is witnessing strong growth due to rising interest in advanced packaging formats, such as 2.5D, 3D ICs, and chiplets. The testing equipment segment is especially critical in automotive and AI-related applications, where chips must meet high reliability and quality thresholds.
By Node Size
Below 10nm Segment Witnesses Fastest Growth Amid Shift to Advanced Nodes
While node sizes above 45nm still dominate total wafer volumes, the below 10nm segment is expected to register the fastest CAGR of over 11% during the forecast period. Foundries such as TSMC, Samsung, and Intel are ramping up production at 7nm, 5nm, and even 3nm levels for applications in HPC, smartphones, and AI accelerators.
Equipment capable of sub-10nm processing requires ultra-high precision and tight process control, which drives demand for next-gen lithography, deposition, and inspection tools. The 20nm to 45nm segment continues to serve mid-performance applications in IoT, automotive, and industrial electronics.
By Application
Integrated Circuits (ICs) Hold the Largest Share; Sensors and Memory Devices Gain Momentum
Integrated Circuits (ICs) represented the largest application segment, given their ubiquity in virtually all electronics, including computing, networking, and embedded systems. The demand is primarily driven by system-on-chip (SoC), analog ICs, and microcontrollers used in smart devices and industrial systems.
Memory devices are a high-growth area, with NAND and DRAM manufacturers investing in high-layer stacking and extreme miniaturisation, demanding precise wafer processing and testing equipment. Sensors and optoelectronics are also growing rapidly, especially with their increasing use in smartphones, automotive safety systems, and IoT applications. These applications require unique process steps, pushing specialised equipment needs.
By End-Use Industry
Consumer Electronics and Telecommunications Lead, Automotive is the Fastest-Growing Segment
Consumer electronics remains the largest end-use segment, driven by the proliferation of smartphones, laptops, gaming devices, and wearables. The telecommunications industry, particularly with the rise of 5G, continues to see large investments in RF chips, baseband processors, and networking ASICs.
However, automotive electronics is emerging as the fastest-growing segment, fuelled by the adoption of advanced driver-assistance systems (ADAS), electric vehicle platforms, and in-vehicle infotainment systems. Industries like healthcare, aerospace & defence, and industrial electronics are also expanding their semiconductor usage for mission-critical, high-reliability applications, contributing to broader equipment demand diversification.
Regional Insights:
Asia-Pacific remains the dominant in the global semiconductor manufacturing equipment market
Asia Pacific held over 65% of global revenue in 2024, led by semiconductor manufacturing powerhouses like Taiwan, South Korea, China, and Japan. The presence of key foundries such as TSMC, Samsung Foundry, SMIC, and equipment manufacturers like Tokyo Electron and SCREEN Holdings positions the region as a global hub. Government support for chip sovereignty, major fab expansion plans, and rising AI and 5G adoption are further strengthening the region’s dominance. China’s push for domestic semiconductor capacity under its “Made in China 2025” initiative is significantly boosting demand for localised equipment, despite geopolitical restrictions.
North America accounted for approximately 17% of the global market in 2024, driven by increased investment in semiconductor manufacturing under the U.S. CHIPS and Science Act. Major players such as Intel, GlobalFoundries, and Texas Instruments are expanding domestic fabs and boosting equipment procurement. Europe contributed around 10% of global market revenue, with significant activity centred around Germany, the Netherlands, and France. The region is focusing on building semiconductor autonomy through the EU Chips Act, aiming to double its share of global chip production by 2030.
Latin America holds a modest share of the global market, with Brazil and Mexico leading regional activity. The region’s focus is primarily on semiconductor assembly and testing, with gradual developments in domestic packaging capabilities. However, broader chip manufacturing capacity remains limited. The Middle East and Africa are at a nascent stage in the semiconductor equipment space. However, countries like Israel play an important role in chip R&D and design, while Gulf nations such as the UAE and Saudi Arabia have begun exploring semiconductor investments as part of economic diversification.
Competition Analysis:
Top Equipment Providers Focus on Precision and Partnerships
Leading players in the global semiconductor manufacturing equipment market are focused on developing next-generation tools that support sub-10nm process nodes, advanced packaging, and heterogeneous integration. Companies such as ASML, Applied Materials, Tokyo Electron, and Lam Research are making substantial investments in precision engineering, nanometre-scale process control, and high-throughput automation systems to maintain their competitive leadership in a technology-intensive market. With shrinking transistor geometries and rising device complexity, these firms are pioneering advancements in EUV lithography, atomic layer deposition, 3D etching, and metrology, enabling chipmakers to produce smaller, faster, and more power-efficient semiconductors.
To sustain their market edge, industry leaders are also expanding their global support infrastructure, localising supply chains, and launching customised solutions tailored to logic, memory, and analog IC manufacturing. Emerging players and specialist firms like SCREEN Holdings, Advantest, and Hitachi High-Tech are reinforcing their positions through innovations in wafer cleaning, inspection, and test equipment, which are critical for yield enhancement and process validation. Strategic initiatives—such as long-term supply agreements with foundries, R&D alliances with semiconductor fabs, and joint ventures for regional expansion—are central to their competitive strategies. These efforts ensure rapid response to evolving customer needs and reinforce the industry’s push toward greater chip performance, lower power consumption, and cost-effective scalability. As demand for AI chips, EV electronics, and IoT devices accelerates, equipment manufacturers are shaping the future of semiconductor production through technical excellence and ecosystem integration.
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