Semiconductor materials market set to reach USD $119.8 billion
The electronics and semiconductor materials market is forecast to see its value more than double from USD $58.0 billion in 2023 to USD $119.8 billion by 2034, underpinned by ongoing technological advancements, rising global digitisation and the increasing strategic significance of semiconductors.
Semiconductors are central to the operation of many modern devices, such as smartphones, laptops, electric vehicles and infrastructure for smart grids. The materials used in their manufacture—including silicon wafers, photoresists and dielectric compounds—are critical in driving improved performance, miniaturisation and greater energy efficiency.
Traditional silicon, though widely used, is reaching its physical and performance limits for certain high-frequency and high-power electronic functions. As a result, alternative materials like gallium nitride (GaN), silicon carbide (SiC), and germanium are gaining traction within the sector. According to Transparency Market Research, "These compound semiconductors offer superior electrical characteristics and thermal performance, making them vital for next-generation devices."
The growing popularity of consumer electronics remains one of the key market drivers. Modern smartphones, tablets, wearables and smart devices require high-quality and efficient materials to achieve advanced features such as high-resolution displays, fast processors and artificial intelligence capabilities.
Electrification in the automotive industry is another major growth area, with both electric vehicles (EVs) and hybrid electric vehicles (HEVs) increasingly demanding wide bandgap materials like SiC and GaN for use in power electronics and battery management systems, which deliver better energy efficiency and thermal management.
The rollout of 5G technology is contributing significantly to demand for semiconductors that can operate reliably at higher frequencies and with low signal loss. Transparency Market Research noted, "Materials such as GaAs (gallium arsenide) and InP (indium phosphide) are particularly well-suited for this purpose, and their demand is projected to soar in the coming years."
Rising volumes of data generated by digital transformation, streaming services, and artificial intelligence applications are also driving the need for high-performance chips in data centres. The use of advanced lithography techniques, including Extreme Ultraviolet (EUV) photoresists, is expected to become more prevalent as manufacturers strive to increase processing power efficiency.
With the traditional pace of advancements described by Moore's Law slowing, the semiconductor materials industry is shifting towards sophisticated packaging technologies such as 3D integrated circuits (ICs), chiplets, and system-in-package (SiP) solutions. These new techniques require additional materials for die attachment, thermal interfaces, and electrical interconnects.
Sustainability is gaining importance. "Manufacturers are exploring ways to reduce energy consumption and waste in semiconductor fabrication. The use of environmentally friendly solvents, recyclable packaging materials, and energy-efficient production methods is expected to gain prominence," the research highlights.
Geopolitical challenges and recent global supply chain disruptions are influencing companies and governments to lessen reliance on overseas suppliers by investing in local semiconductor research, development, and production capabilities. The research states, "As countries look to reduce dependency on foreign suppliers, localizing production and securing access to critical raw materials is becoming a strategic imperative."
An emerging segment is flexible and printed electronics, which are based on organic semiconductors and novel materials such as graphene. These are paving the way for innovations in wearables, medical devices and foldable displays, which could become more significant to the market over the next decade.
On a regional basis, Asia-Pacific dominates semiconductor production, led by China, South Korea, Taiwan, and Japan. The research notes: "China's 'Made in China 2025' initiative and South Korea's aggressive push for semiconductor self-sufficiency are driving domestic consumption of materials. Meanwhile, Taiwan's TSMC and Japan's Shin-Etsu Chemical remain global leaders in wafer and chemical supply, respectively."
North America is focusing on innovation and strategic investment, particularly through increased domestic investment in semiconductor fabrication and design as encouraged by the CHIPS and Science Act. Europe, meanwhile, is focusing on specialty materials and sustainability, with countries like Germany and the Netherlands targeting investment in chemicals, EUV lithography and automotive semiconductors.
The industry continues to face challenges, including material shortages, price volatility, tighter environmental regulations, and the need for skilled personnel in chemistry, materials science, and semiconductor engineering. Transparency Market Research explains, "Despite a positive growth outlook, the electronics and semiconductor materials market faces several challenges: Material Shortages and Price Volatility: Fluctuations in raw material availability can impact production schedules and cost margins. Environmental Regulations: Compliance with global standards for hazardous substances and emissions is becoming increasingly stringent. Talent Shortages: A skilled workforce in chemistry, materials science, and semiconductor engineering is in short supply, affecting innovation and production scalability. However, these challenges also present opportunities. Companies that invest in vertical integration, R&D, and collaborative innovation with academia and industry stakeholders will be well-positioned to lead the next phase of growth."
The comprehensive research by Transparency Market Research forecasts that demand for high-performance semiconductor materials will continue to grow, driven by the trends of electrification, connectivity, automation and sustainability.
