EUV Lithography Market By Equipment (Light Source, Optics, Mask), End User (Integrated Device Manufacturer (IDM), Foundries), & Region for 2024-2031

EUV Lithography Market Valuation - 2024-2031

Advance technologies such as artificial intelligence, 5G connectivity, and Internet of Things (IoT) are integrated into EUV lithography for developing high-performance and energy-efficient semiconductor chips As a result of this, the EUV Lithography Market is estimated to reach a valuation of USD 40.76 Billion over the forecast period, surpassing a market size of aroundUSD 9.42 Billion valued in 2023.

Also, the constant pursuit of Moore's Law, along with the requirement for better transistor density in semiconductor manufacturing, is driving the use of EUV lithography technology and enabling the market to grow at aCAGR of 20.1% from 2024 to 2031.

EUV Lithography Market: Definition/ Overview

Extreme Ultraviolet (EUV) lithography is a cutting-edge semiconductor manufacturing method that creates microchips with extremely small features. It uses extremely short wavelengths of light in the EUV spectrum to precisely pattern semiconductor materials at the nanoscale scale. In EUV lithography, a high-energy laser produces EUV light, which is subsequently focused on a photomask with the appropriate circuit designs. These designs are subsequently transferred on a silicon wafer coated with light-sensitive material, allowing for the creation of complex circuitry.

Furthermore, its applications are many, ranging from computing to telecommunications, automotive, healthcare, and consumer electronics. From speedier processors and memory chips to more efficient sensors and advanced integrated circuits, EUV lithography is critical to the creation of next-generation electronic gadgets that power today's society.

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What Factors are Propelling the Growth of the EUV Lithography Market?

The Internet of Things (IoT), big data analytics, machine learning, and artificial intelligence (AI) are driving the growing demand for high-performance computing capabilities. Similarly, the consumer electronics business is constantly looking for smaller, more powerful products. EUV lithography is essential for generating the sophisticated chips required for these applications, which fuels market growth.

The growth of the EUV Lithography Market is being fueled by the establishment of a strong supply chain and ecosystem, which includes the manufacturing of specialized materials, equipment, and knowledge. As more semiconductor manufacturers embrace EUV technology, suppliers of crucial components and materials have expanded their operations to cater the demands, thereby propelling the market forward.

Furthermore, leading semiconductor manufacturers and lithography equipment providers have made significant R&D investments to speed the development and commercialization of EUV lithography technology. These investments have resulted in advances to EUV light sources, masks, and resists, making EUV lithography more practical and cost-effective in mass manufacturing.

What are the Potential Impacts of Adoption of EUV Lithography in the Market?

EUV lithography systems are extremely expensive, with a single machine costing over $100 million. In addition, the upkeep and operation of these equipment necessitate substantial continuing expenditure. The high cost of equipment affects not only the capital investment of semiconductor fabrication plants (fabs) but also the whole cost of chip production, potentially limiting the use of EUV lithography to only the largest and most financially robust semiconductor manufacturers.

EUV lithography operates at a wavelength of 13.5 nm, posing various technological hurdles such as mirror smoothness, mask flaws, and photoresist sensitivity. As a result, achieving and maintaining the extremely high precision required for efficient EUV lithography presents considerable technical challenges in the market, resulting in slower adoption.

Furthermore, while EUV lithography is seen as a key facilitator of Moore's Law, other patterning technologies (such as multi-patterning with deep ultraviolet (DUV) lithography, directed self-assembly, and nanoimprint lithography) are evolving. These alternatives provide more cost-effective solutions for specific applications or chip generations. This competition between EUV and these competing technologies influences the rate at which EUV is implemented throughout the semiconductor industry.

Category-Wise Acumens

What are the Drivers that Contribute to the Demand for the Light Source?

According to VMR analysis, the light source segment is estimated to hold the largest market share during the forecast period. The light source in EUV lithography is one of the most technologically advanced parts of the system. To generate EUV light, microscopic tin droplets must be converted into a plasma that emits light with the necessary wavelength of 13.5 nm. This process is extremely complex, requiring high-power lasers, precise timing, and sophisticated control systems. The uniqueness and complexity of this technology contribute to its considerable market share, as it is vital to the operation of EUV lithography and necessitates significant expenditure in research, development, and manufacture.

The development and operational costs of EUV light sources are high. The demand for intense, reliable, and clean EUV light necessitates continuing investments to improve efficiency and dependability. These expenses are reflected in market share, as expenditures in light source technology account for a considerable amount of the total cost of EUV lithography systems. Also, operational costs, such as maintenance and energy consumption, add to the light source's financial significance in the EUV equipment market.

Furthermore, the EUV light source market is distinguished by a small number of providers capable of delivering technology that meets semiconductor manufacturers' demanding standards. This constraint is due to the high entry hurdles, which include the requirement for specialized knowledge, patents, and significant capital expenditure. The paucity of providers results in a higher market share for the light source segment, since the technology's complexity and crucial function in EUV lithography produce a high-value component with less competition.

What makes Foundries the Epicenter of Growth in the market?

The foundries segment is estimated to dominate the EUV Lithography Market during the forecast period. Foundries are the backbone of semiconductor manufacturing, offering high-volume manufacturing services to a diverse range of clients, including fabless semiconductor companies. Their business model is based on the ability to efficiently create huge quantities of chips, making them ideal candidates for implementing cutting-edge technologies such as EUV lithography. EUV lithography's ability to offer lower feature sizes and more complex chip designs without additional patterning steps makes it particularly appealing to foundries that want to stay on the cutting edge of technology while also addressing the needs of their broad client base.

Foundries invest substantially in cutting-edge manufacturing technology to preserve a competitive advantage, and EUV lithography is no different. Because of their large-scale operations, foundries are better positioned to absorb the high initial expenditures associated with EUV lithography equipment and amortize these costs across a larger volume of chips. This capacity to spread costs across large numbers allows foundries to achieve economies of scale, lowering cost per chip and increasing market competitiveness.

Furthermore, foundries establish strategic alliances with major technology businesses and fabless semiconductor enterprises that need cutting-edge process technologies for their next-generation devices. The demand for smaller, more efficient, more powerful semiconductors motivates foundries to use EUV lithography to achieve these strict specifications. The demand from high-profile clients for sophisticated process nodes that can only be economically achieved using EUV technology strengthens foundries' position in the EUV Lithography Market.

Country/Region-wise Acumens

Will Flourishing Semiconductor Industry in Asia Pacific Fuel the Market?

According to VMR analyst, Asia Pacific is estimated to dominate the EUV Lithography Market during the forecast period. Asia Pacific is home to some of the world's top semiconductor foundries and integrated device makers (IDMs), including industry leaders like South Korea, Taiwan, and Japan. With such a large concentration of semiconductor production facilities, the region is ideally positioned as a main market for advanced manufacturing technologies such as EUV lithography.

Governments in the Asia Pacific actively assist the semiconductor sector by making large investments and implementing policies that promote technical growth and self-sufficiency. This enabling environment fosters the use of cutting-edge technologies such as EUV lithography to increase the worldwide competitiveness of their semiconductor sectors.

Furthermore, the Asia Pacific region is known for quick technological adoption and a strong culture of innovation. This mentality encourages semiconductor producers in the region to constantly enhance their manufacturing capacities using the most sophisticated technologies available, such as EUV lithography, to meet the growing demand for smaller, more powerful semiconductor devices.

How does a Strong R&D Ecosystem Support Market Growth in North America?

North America, particularly the United States, has a strong research and development environment backed by top universities, research organizations, and semiconductor businesses. This strong emphasis on innovation and the development of cutting-edge technology promotes breakthroughs in EUV lithography, resulting in increased adoption and growth in the region.

North America, which is home to some of the world's largest semiconductor businesses and design houses, benefits from these industry giants' strategic decisions and investments in EUV lithography. These companies' commitment to expanding semiconductor technology has a direct impact on the region's progress in the EUV Lithography Market.

Furthermore, the US government and other North American economies are increasingly focusing on reviving the indigenous chip manufacturing industry. Initiatives and funding focused on improving semiconductor manufacturing capabilities, including investments in advanced technologies such as EUV lithography, are critical to supporting the growth of the EUV Lithography Market in North America.

Competitive Landscape

The competitive landscape of the EUV Lithography Market is marked by fierce competition among significant competitors seeking to establish dominance in this rapidly evolving sector. Companies fight intensely to improve the performance and efficiency of EUV lithography systems, to meet the severe standards of next-generation chip production.

Some of the prominent players operating in the EUV Lithography Market include:

ASML Holding N.V., TEL, Nikon Corporation, Canon Inc., Carl Zeiss AG, HOYA Corporation, TRUMPF GmbH & Co. KG, Cymer, Inc, X-ray Lithography, Photronics, Inc., DNP Company, Ltd., SCREEN Holdings Co., Ltd., Merck KGaA, Lam Research Corporation, KLA Corporation, Applied Materials, Inc., Tokyo Ohka Kogyo Co., Ltd., JSR Corporation, Sumco Corporation, and Hitachi High-Technologies Corporation.

Latest Developments

In February 2024, ASML, the leading manufacturer of EUV lithography systems, published good financial results for Q4 2023, owing to continued demand for their EUV equipment. The company also reaffirmed its commitment to increasing its EUV capacity to meet future demand.

In January 2024, TEL and Canon announced a collaboration to provide next-generation EUV mask blanks with increased performance and durability. This partnership will address the issues of scaling EUV lithography for future chip generations.

In November 2023, TSMC, the world's largest contract chipmaker, announced plans to build a new fab in Arizona using EUV lithography technology. This investment highlights the continuous importance of EUV in advanced chip fabrication.