Semiconductor Test Equipment - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Semiconductor Test Equipment Market size is estimated at USD 14.23 billion in 2024, and is expected to reach USD 19.22 billion by 2029, growing at a CAGR of 6.20% during the forecast period (2024-2029).

Key Highlights

• The semiconductor test equipment market is expected to grow due to technological advancements such as AI, HPC, 5G, and automated vehicles. Further, the technological advancement in chip technology and growing production of 3nm and 5nm semiconductor chips create a huge demand for efficient test equipment to test small process geometrics.
• As next-generation devices are designed with smaller chips, Apple announced it would use 3nm technology in iPhone 15 Pro/Ultra; such developments drive market growth. Testing semiconductors with 5nm or smaller process nodes is challenging. Manufacturers focus on developing new and advanced test solutions that ensure the best yield, quality, and control costs.
• The government's efforts to increase in-house production and investment by leading semiconductor fabs will increase semiconductor production, which will likely foster the market for testing equipment. For instance, in February 2024, the Government of India approved three semiconductor units for the development of semiconductor and display manufacturing ecosystems in India.
• The rising utilization of electronic components in automobile navigation, safety systems, and infotainment also plays a significant role in propelling the growth of semiconductor testing equipment. Moreover, the increasing demand for semiconductors in consumer electronics like smartphones, tablets, and laptops/PCs is anticipated to be a key driver in this market. Moreover, the semiconductor test equipment market is expected to benefit from the increasing adoption of internet-of-things (IoT) in different industrial sectors.
• The high cost of advanced testing equipment restricts market growth. With the introduction of advanced chip technology, testing equipment was upgraded to include the latest technology, increasing the equipment cost. Further, stringent government regulations related to semiconductor equipment facilitate market growth.
• Also, the crisis in Ukraine is the latest obstacle to arise, and it can cause significant disruptions in various manufacturing sectors such as high-tech, automotive, consumer electronics, and household appliances. This could have far-reaching consequences for the industry as a whole. Russia and Ukraine play crucial roles in the global semiconductor supply chain, supplying essential materials such as palladium and neon, vital for producing silicon wafers used in modern devices and equipment. The suspended semiconductor production significantly impacts the sales of testing equipment. The ongoing dispute between the US and China will significantly impact the market growth as China is the major consumer electronics market in the world. However, it largely depends on other countries for advanced semiconductor equipment.

Semiconductor Test Equipment Market Trends

Semiconductor Automated Test Equipment (ATE) to Hold Significant Market Share

• Owing to the expansion of IoT applications, smart devices, and small semiconductors are becoming more prevalent, driving demand for advanced semiconductor automated testing equipment.
• According to Ericsson, the number of connected devices worldwide will almost double between 2022 and 2028. This growth is expected to be driven by a rise in short-range IoT devices, with a forecast of 28.72 billion such devices by 2028. Connected devices include wearables, connected cars, and smart sensors.
• Automated testing equipment reduces manufacturing costs and time and increases productivity. The ongoing development of complex devices for better applications drives demand for high-throughput test equipment. An ATE can eliminate false test report results by automating processes susceptible to human mistakes. When testing is done automatically, test results are uniform and cannot be distorted, guaranteeing consistency in product quality. An ATE can help reduce testing costs by reducing the time and materials required. This can be achieved by using programmable functions on ATEs that automate test sequences.
• The growing adoption of smart electronics components and advanced technologies such as ADAS, infotainment systems, and AI assistants in today's vehicles creates significant growth opportunities. ATE systems allow for detailed testing of components such as ECUs, sensors, and infotainment systems, guaranteeing reliability, functionality, and compliance with automotive industry norms.
• According to the IEA, EV sales were expected to continue to surge in 2023. Approximately 2.3 million electric cars were sold in the first quarter alone, representing a 25% increase from the same period last year. This growth is largely attributed to national policies and incentives, as well as high oil prices, which are motivating prospective buyers. The increased demand for electric and connected vehicles will drive the ATE market growth.

Asia-Pacific to Hold Significant Market Share

• China holds a significant share of the testing equipment market. The country is pursuing an ambitious semiconductor agenda with USD 150 billion in funding. The country aims to enhance its domestic IC industry and increase its chip production.
• The ongoing US-China trade war has intensified tensions in this crucial sector, where the most advanced process technology is concentrated, leading many Chinese companies to invest in semiconductor foundries. China has unveiled various initiatives to strengthen its semiconductor sector, such as a substantial expansion campaign in the foundry, gallium-nitride (GaN), and silicon carbide (SiC) markets. The growing semiconductor business and increasing chip production capabilities in the region are expected to drive the demand for testing equipment. China's tech industry aims to ascend the global technology value chain by capitalizing on its strong presence in telecommunications, renewables, and electric vehicles (EVs). In addition to these sectors, the industry is now focusing on advanced semiconductors. This transition is primarily driven by advancements in advanced node manufacturing, the expansion of the memory market, active involvement in the silicon carbide (SiC) race, and strategic investments in advanced packaging and manufacturing equipment. The growing foundry business and investments in fabs throughout China are anticipated to stimulate market growth.
• Moreover, China and the United States are growing competition over semiconductor intellectual property and manufacturing. The United States is taking steps to boost its chip production while imposing sanctions to hinder China's efforts to achieve self-reliance in this crucial industry. As a result, the region is making significant investments in the semiconductor manufacturing and testing business to enhance its self-reliance capabilities. An example is the recent announcement in September 2023 of China's new state-backed investment fund, which aims to raise approximately USD 40 billion for the semiconductor sector. This fund will primarily focus on acquiring chip manufacturing equipment to catch up to the United States and other competitors.
• The expansion of foundries directly impacts the growth of the testing equipment market. Through the incentive package, Beijing intends to enhance its assistance to Chinese chip companies in constructing, expanding, or upgrading domestic facilities for fabrication, assembly, packaging, and research and development.
• Further, according to IEA, China accounted for nearly 60% of all new electric car registrations worldwide in 2023. This region is primarily dominated by companies like BYD and others, which are making significant investments in the production of electric vehicles. The growth of the EV sector in the region is expected to drive the market's potential.

Semiconductor Test Equipment Industry Overview

The semiconductor test equipment market is semi-consolidated and dominated by leading vendors such as Advantest Corporation, Teradyne, Inc., Cohu Inc., Tokyo Electron Limited, HCT Co. Ltd, and Tokyo Seimitsu Co. Ltd. Companies continuously focus on enhancing their market presence by launching new products, expanding their operations, or entering strategic mergers and acquisitions, partnerships, and collaborations.

• February 2024 - Cohu Inc. announced that the Sense+ system, Cohu's recent MEMS test solution portfolio product, was selected by the United States fabless semiconductor manufacturer with µ-sense to test their next-generation high-fidelity microphones.
• December 2023 - Advantest Corporation launched ACS Real-time Data Infrastructure (RTDI) to enhance AI, ML, and data analytics decision-making in a single, integrated platform. The new infrastructure securely gathers, processes, analyzes, and monitors test data to enable customers to automate the procedure of converting insights into actionable test decisions. This helps consumers and partners optimize quality, reduce test time, and enhance smart packaging.

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