The semiconductor industry is the cornerstone of modern science and technology, driving the transformation and progress of global technology. Silicon components play a vital role in this value chain. According to the Critical Materials for Silicon Components Report published by TECHCET, the global semiconductor silicon components market is expected to grow to $800 million in revenue by 2025 and maintain a CAGR of 4.5% between 2024 and 2029, and is expected to climb to $940 million by 2027. This growth is driven by a combination of sales, demand for replacement parts, and technology upgrades.
The demand for new systems and replacement parts is driving the market growth
The growth of the silicon components market was driven by a steady increase in sales of new systems. With the advancement of technology, the demand for high-performance semiconductor chips in smartphones, tablets, data centers, artificial intelligence, and automotive electronics continues to grow. The upgrading of the chip manufacturing process has promoted the procurement of advanced manufacturing equipment, and the indispensable silicon components of these equipment have naturally ushered in a larger market space. Sales of new system components are expected to increase by 8 percent. Taking artificial intelligence as an example, the surge in demand for computing power for deep learning has prompted chipmakers to continuously invest in advanced production equipment, which has led to an increase in the purchase of silicon components.
On the other hand, the replacement parts market is also not to be overlooked, with sales expected to increase by 2%. After long-term operation of semiconductor manufacturing equipment, some silicon components will need to be replaced due to wear or aging to ensure the stability and production efficiency of the equipment. With the expansion of global semiconductor manufacturing, the equipment put into production in the early stage has gradually entered the maintenance and update cycle, and in order to maintain the yield rate and stability of the production line, enterprises will regularly replace silicon components to provide continuous demand for the market.
Figure: The semiconductor silicon components market is growing
There is a strong demand for high-purity silicon components, and technological upgrades bring opportunities
Semiconductor manufacturers' relentless pursuit of higher yields and better production efficiency is also driving the demand for high-purity silicon parts. In the chip manufacturing process, the purity of silicon parts has a direct impact on the performance and quality of the final product. High-purity silicon components can effectively reduce impurity interference, reduce defect rate, and improve production yield. Therefore, the advancement of advanced manufacturing processes has prompted enterprises to increase their dependence on high-purity silicon components. For example, in 5nm and below, unprecedented demands are placed on the precision, purity, and stability of silicon components, driving suppliers to continuously optimize their products for more advanced manufacturing technologies.
Despite the global macroeconomic uncertainties, technological upgrades still bring new growth points to the silicon components market. As the semiconductor industry evolves to more advanced manufacturing processes, chipmakers need to continuously update their equipment and adapt to new silicon components to drive overall market growth.
Geopolitical risks and supply chain challenges
However, the development of the silicon components market has not been smooth sailing. Geopolitical tensions, especially the US-China trade conflict, have created challenges for the industry. U.S. export restrictions on semiconductor manufacturing equipment and related silicon components have made it difficult for companies in some countries to source critical components, increasing costs and supply chain uncertainty. At the same time, China's control measures on key semiconductor materials have also affected the stability of the global silicon component supply chain. In the face of these challenges, companies are actively seeking to diversify their supply chain strategies to mitigate risk and find alternative material sources to ensure stable production in the future.
Summary
Overall, the semiconductor silicon components market will continue to grow steadily, with new system sales, demand for replacement parts, and high-purity technology upgrades being the main drivers of market expansion. Despite the challenges posed by geopolitical and supply chain issues, the market remains full of opportunities as chip manufacturing technology continues to evolve.
