Global Wafer Fab Equipment revenue poised to surge

[Daniel Nenni]

With semiconductor device revenue showing 19% year-over-year growth (2) , WFE vendors are adapting to uneven CapEx by broadening their application mix…

OUTLINE:

Wafer Fab Equipment (WFE) vendors’ overall revenue for 2024 is projected at $133 billion, with 83% coming from shipments and 17% from service & support. The overall market will reach $165 billion by 2029.

USA-headquartered companies traditionally lead in revenue generation. On the other hand, in 2023 and 2024, mainland China will be the most important equipment shipment destination, with a third of the overall WFE revenue

WFE market leaders are ASML, Applied Materials (AMAT), Lam Research, Tokyo Electron Limited (TEL), and KLA.

The semiconductor industry is on a strong upward trajectory, with revenue expected to reach $630 billion by 2024 and a 19% year-over-year growth from 2023 to 2024. However, beneath these impressive figures, the reality is more complex. Growth will vary significantly across different device segments. Yole Group analysts attribute this surge primarily to investments in generative AI for DRAM / HBM and processors, while NAND CapEx remains weak, and CapEx in the legacy logic and specialty markets faces potential risks. In this uncertain landscape, WFE vendors are navigating uneven capital expenditures by diversifying their application portfolios to sustain or boost their revenue levels.

By 2029, overall WFE revenue is projected to reach $165 billion, maintaining similar proportions with 2024 between the two segments, shipments and service & support, announces Yole Group in its new report, Status of the Wafer Fab Equipment Industry.

WFE shipments are expected to grow to $139 billion during this period, with a +4.7% CAGR . This segment is clearly driven by changes in device architecture across memory and logic. At the same time, the service & support segment is set to generate $27 billion in revenue, with a +3.3% CAGR (4). Indeed, it is pushed by the surge in installed base utilization rates and increasing machinery complexity.

Yole Group has unveiled its latest semiconductor manufacturing report, Status of the Wafer Fab Equipment Industry. This comprehensive technology and market analysis provides a thorough overview of the semiconductor equipment market, including annual market size data and a detailed historical perspective. Yole Group’s analysts offer a compelling breakdown of the wafer fab equipment (WFE) market by process technology and device application, along with an in-depth analysis of vendor market shares. The report also explores the relationship between WFE market size, the semiconductor device market, and CapEx, covering related market segments, subsystems, components, and modules. Additionally, it offers a technological outlook, detailing equipment characteristics such as equipment morphology with detail on chamber types, substrate types and sizes, and emerging process parameter trends that influence equipment architecture. The study also includes a significant analysis of the supply chain, recent mergers and acquisitions, and updates from the equipment industry.

This report is part of Yole Group’s global semiconductor manufacturing collection, which includes resources such as the Wafer Fab Equipment Market Monitor and the upcoming Back End Equipment Market Monitor. The complete collection can be accessed HERE.

From a player point of view, the overall market is dominated by the big-five WFE vendors that have occupied their position for many years: ASML, which has been leading the market since 2023, followed by AMAT (Leader in 2022), Lam Research, TEL, and KLA.

Global Wafer Fab Equipment revenue poised to surge - News

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siliconsemiconductor.net

 

[Barnsley]

India , Saudi Arabia , China all going in big on Semicon apparently.

Also UAE

Should be a boon for anyone in Semicon Industry supply chain.

Lets hope more than 3 or 4 companies get to eat at the trough

 

[YOUSUTO]

Nice graph of the lead fab equipment suppliers, it looks like good times are ahead!

 

[tooLongInEDA]

This is interesting data (at least for some of us who've never paid much attention to this area). Seems that Applied Materials is actually significantly larger than ASML by revenues, though certainly far smaller by media coverage. And Tokyo Electron is comparable to ASML on revenues. Why isn't AML larger on the sales side ?

Would be interesting to see the market breakdown by country of supplier: US, Japan, Netherlands, China, others. We're told China is coming onto the scene here. Is this showing up in any data like this yet ?

 

[samwilde]

We're told China is coming onto the scene here. Is this showing up in any data like this yet ?

Hwatsing, NAURA, ACM Research, in that chart are Chinese companies. The Chinese fab equipment supplier market is way more fragmented in terms of suppliers so I bet a lot of them are in the gray area since the chart only shows the top four in each segment. For example AMEC is a fairly large supplier not in that chart.

AMEC's Revenue Grows with Advanced Etch Technology Fueling China's Semiconductor Surge

Blog about Atomic Layer Deposition (ALD), Atomic Layer Etching (ALE) and Chemical Vapor Deposition (CVD)

www.blog.baldengineering.com

Chinese fab equipment suppliers typically grow at like 33% annual revenue growth rate which is way faster than their competitors so you should be hearing more about them over the next decade.

 

[milesgehm]

This is interesting data (at least for some of us who've never paid much attention to this area). Seems that Applied Materials is actually significantly larger than ASML by revenues, though certainly far smaller by media coverage. And Tokyo Electron is comparable to ASML on revenues. Why isn't AML larger on the sales side ?

Would be interesting to see the market breakdown by country of supplier: US, Japan, Netherlands, China, others. We're told China is coming onto the scene here. Is this showing up in any data like this yet ?

The total revenue is different for each column which makes it hard to compare ASML and AMAT, TEL. At the end of 2023 ASML revenue was about 20% higher than AMAT. TEL revenue is considerably smaller than AMAT.

 

[Barnsley]

https://www.theedgesingapore.com/ne...ls-forecast-spurs-concern-about-chip-spending

Now Applied having some problem

 

[supsemi.com]

hope all good!

 

[Daniel Nenni]

From analysts:

Applied Materials reported strong results for Q3 2024 but guided Q4 revenue below consensus estimates. China accounted for 30% of Q3 sales and will remain 30% of Q4 sales. Over the longer term, management sees that WFE intensity, propped up by the strong China demand of 18% in 2023, could decline and normalize to around 15%, essentially backing away from their long-standing view that WFE should perform in-line, or outperform, semis.


- AMAT has OK QTR but outlook below expectations as 2025 weakens
- Strength in AI cannot offset weakness in the rest of the market
- Increasing headwinds going into 2025 dampen overall outlook
- Weakness combined with regulatory uncertainty reduce valuations

 

[MKWVentures]

Great data and vendor listing

Is 5% CAGR a surge? is it faster or slower growth than last 20 years?

 

[Artificer60]

Chinese fab equipment suppliers typically grow at like 33% annual revenue growth rate which is way faster than their competitors so you should be hearing more about them over the next decade.

This made me think of a comment from Ross Perot during his presidential run. He was talking about Bill Clinton's claims about how much Arkansas's economy had grown while Clinton was governor. His comment was if you start with a penny and increase it by 100% you still only have two cents.

Seriously, if you have 5% of a $15B market and you grow by 33% you now have ~0.25B dollars more than you had last year. A company with 40% of that same market only needs to grow about 4% to match that growth. It is much easier for the little guys to show proportionally larger growth. I think the more telling metric is how the percentage of the market is changing.

 

[samwilde]

AMEC had $0.88 billion USD in revenue in 2023. 33% of that is $0.29 billion USD.

They are quite far from being the largest semi tools company in China. That would be NAURA with around $3 billion USD in revenue and 50.3% annual revenue growth rate last year.

ACM Research had $0.56 billion USD in revenue in 2023. 43.4% annual revenue growth.

These companies have roadmaps until 2030 where they will double production every two or three years.

 

[Barnsley]

AMEC had $0.88 billion USD in revenue in 2023. 33% of that is $0.29 billion USD.

They are quite far from being the largest semi tools company in China. That would be NAURA with around $3 billion USD in revenue and 50.3% annual revenue growth rate last year.

ACM Research had $0.56 billion USD in revenue in 2023. 43.4% annual revenue growth.

These companies have roadmaps until 2030 where they will double production every two or three years.

When do you think the consolidation will kick in?

 

[samwilde]

When do you think the consolidation will kick in?

There have been rumors of mergers of the three largest, the companies I mentioned, with the smaller players in China. One rumor is they could acquire companies which offer semi tools they currently do not produce. For example AMEC make etchers but have no CMP tools. The main CMP tool maker in China is a smaller independent company. There are also rumors of Naura entering the lithography market. But thus far nothing like that has actually happened.

Right now it is easier for them to grow by just scaling up their production facilities and taking more of the Chinese market. But I would say at most around 2030 they will have to start expanding to more product categories if they want to continue to grow.