(MENAFN- GlobeNewsWire - Nasdaq) Surging investments are fueling the global race for next-generation nodes. AI is concurrently driving insatiable chip demand while optimizing fab efficiency. Meanwhile, geopolitical factors are actively reshaping supply chains and accelerating the development of regional manufacturing ecosystems to ensure technological sovereignty.

Chicago, Oct. 30, 2025 (GLOBE NEWSWIRE) -- The global semiconductor manufacturing equipment market was valued at US$ 93.03 billion in 2024 and is expected to reach US$ 224.44 billion by 2033, growing at a CAGR of 10.28% during the forecast period 2025–2033.

The financial engine of the semiconductor manufacturing equipment market is firing on all cylinders, with total global sales projected to hit a record US$ 125.5 billion in 2025. This momentum is expected to carry into 2026, pushing sales to an even higher peak of US$ 138.1 billion. This surge is not speculative; it is rooted in tangible capital expenditure plans from the world's largest chipmakers. Global front-end fab equipment spending alone is anticipated to reach US$ 116 billion in 2025, with foundries leading the charge by investing approximately US$ 61 billion.

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The memory segment is also making a powerful recovery, with spending forecast to increase by 12% to US$ 37 billion in 2025. These investments directly translate into orders for sophisticated manufacturing tools. The Wafer Fab Equipment (WFE) segment, which forms the core of the industry, is projected to grow 6.2% to US$ 110.8 billion in 2025, building on a record US$ 104.3 billion the previous year. The robust spending across both logic and memory sectors signals a broad-based expansion cycle.

Key Findings in Semiconductor Manufacturing Equipment Market

Market Forecast (2033)	US$ 224.44 billion
CAGR	10.28%
Largest Region (2024)	Asia Pacific (79.8%)
By Type	Front-End Equipment (74.50%)
By Application	Automation (68.90%)
Top Drivers	Surging global demand for high-performance chips for AI applications. Automotive industry's shift to EVs and autonomous driving technology. Massive expansion of IoT devices and 5G network infrastructure.
Top Trends	Extreme Ultraviolet (EUV) lithography becoming a core manufacturing technology. AI-driven algorithms are being integrated to optimize factory yields. Platform-based integration of tools is replacing single-process, isolated innovations.
Top Challenges	Geopolitical tensions and trade restrictions disrupt complex global supply chains.[18] Extreme complexity of advanced nodes pushes engineering to physical limits. A rare combination of AI and semiconductor domain expertise is required

AI Chip Complexity Directly Fuels Demand for Advanced Manufacturing Tools in the Semiconductor Manufacturing Equipment Market

The explosive growth of artificial intelligence is the primary catalyst reshaping the semiconductor manufacturing landscape. AI applications require chips with unprecedented complexity, driving demand for the most advanced manufacturing and packaging technologies. This directly fuels equipment sales, as seen in the stable 6.7% growth expected for foundry and logic equipment, which will reach US$ 64.8 billion in 2025, driven by the push toward 2-nanometer process nodes. The computational demands of AI have created a direct correlation between AI model advancement and equipment investment.

This trend is also invigorating the back-end of the production line. The market for semiconductor test equipment is set to soar by 23.2% in 2025 to a record US$ 9.3 billion. Concurrently, assembly and packaging equipment sales are forecast to climb 7.7% to US$ 5.4 billion. These increases are a direct consequence of the intricate architectures required for AI accelerators and the critical need for High-Bandwidth Memory (HBM), which relies on advanced packaging techniques.

Advanced Packaging Equipment Emerges as a Critical Performance Bottleneck

As traditional chip scaling slows in the semiconductor manufacturing equipment market, advanced packaging has become a pivotal technology for achieving performance gains, transforming it into a high-growth segment for equipment suppliers. The demand for packaging solutions like TSMC's Chip-on-Wafer-on-Substrate (CoWoS) is so intense that despite plans to double capacity in both 2024 and 2025, supply cannot meet customer demand. This supply-demand gap has triggered a multi-year expansion wave, with TSMC providing equipment makers with order requirements deep into 2026.

The scale of this expansion is substantial; TSMC's monthly CoWoS capacity is projected to surge from 35,000-40,000 wafers in 2024 to 80,000 in 2025, and potentially 140,000 or more by 2026. This directly benefits a host of equipment suppliers. For instance, ASML has begun shipping its first lithography systems specifically designed for the advanced packaging market, opening a new revenue stream beyond its traditional front-end focus. Hon Precision Industry, a key supplier of test handlers for CoWoS, is expanding its capacity by 40% to cope with demand from clients like TSMC and Nvidia.

Extreme Ultraviolet Lithography Monopoly Underpins Leading-Edge Production Capacity in the Semiconductor Manufacturing Equipment Market

Extreme Ultraviolet (EUV) lithography remains the single most critical enabling technology for manufacturing advanced semiconductors, with ASML holding a de facto monopoly. The demand for these systems is a direct proxy for leading-edge fab investment. In its third quarter of 2025, ASML reported a robust €5.4 billion in net bookings, with two-thirds of that value coming from orders for its EUV systems. The company sold nine EUV systems in the quarter alone, at an average price of €400 million each.

The insatiable demand from foundries like TSMC, Samsung, and Intel for EUV machines is directly tied to their roadmaps for 3nm, 2nm, and future nodes, which are essential for producing next-generation AI chips. ASML's outlook reflects this, with the company anticipating a 15% revenue growth in 2025 and an improved outlook for 2026. The strategic importance and high cost of EUV systems make them a significant driver of the overall value of the semiconductor manufacturing equipment market.

China's Strategic Push for Self-Sufficiency Reshapes Equipment Market Share

Driven by a national strategy to reduce foreign dependence, China's domestic semiconductor manufacturing equipment makers are rapidly gaining market share. This is not just a policy goal but a market reality, reflected in the explosive revenue growth of leading Chinese firms. Naura Technology Group saw its revenue grow nearly fivefold to ¥29.8 billion, while Advanced Micro-Fabrication Equipment Inc. (AMEC) quadrupled its earnings to ¥9.1 billion in 2024. These firms are making tangible progress in critical process areas like dry etch and chemical vapor deposition (CVD).

This domestic expansion in the semiconductor manufacturing equipment market is fueled by massive capital spending within China, which remains the largest geographic market for equipment. Between 2019 and 2024, Chinese suppliers increased their market share in deposition tools from 2% to 7% and gained 8 percentage points in the dry etch market. However, this growth has also led to a concentration of revenue for global players, with Lam Research deriving 43% of its sales from China in Q3 2025 and Applied Materials earning 37% of its revenue there. This dependency presents a significant geopolitical risk amid ongoing trade tensions.

System-Level Integration Becomes a Key Strategy for Chinese Equipment Suppliers

Chinese equipment manufacturers in the semiconductor manufacturing equipment market are evolving their strategy from developing isolated tools to providing integrated, system-level solutions. In the first ten months of 2025, leading companies raised over 13 billion yuan to fund strategic acquisitions aimed at creating comprehensive domestic toolchains. This shift is designed to ensure process compatibility and guarantee yield performance for domestic chipmakers, offering a viable alternative to foreign-supplied equipment suites.

A prime example is Naura's acquisition of a controlling stake in Kingsemi, a specialist in coating and developing equipment. The move vertically integrates Naura's existing strengths in etching and deposition with crucial steps surrounding the lithography process. Similarly, Hwatsing, a leader in chemical mechanical polishing (CMP) tools, acquired Xinyu Semiconductor to offer customers a more comprehensive package of equipment and services. This consolidation trend is creating more formidable domestic competitors within the semiconductor manufacturing equipment market.

Global Government Subsidies Fuel a Wave of New Fab Construction

Governments worldwide are injecting tens of billions of dollars into their domestic semiconductor ecosystems, directly funding the construction of new fabrication plants and creating a guaranteed order book for equipment suppliers. The United States' CHIPS Act allocates US$ 52.7 billion to incentivize domestic manufacturing and R&D. So far, over US$ 33 billion in manufacturing grants has been awarded to spur the construction of new fabs. This funding directly supports equipment purchases for companies building facilities on U.S. soil.

This trend is global. Japan has pledged subsidies totaling ¥1.2 trillion (about US$ 7.8 billion) for TSMC's new facilities in Kumamoto and is allocating another US$ 2.1 billion in 2025 to support its domestic champion, Rapidus. The European Union, through the European Chips Act, approved a €920 million subsidy for Infineon's new fab in Germany. These government-backed projects are creating a geographically diverse and robust demand base for the semiconductor manufacturing equipment market, aimed at enhancing supply chain resilience.

AI Integration into Manufacturing Processes Drives Next-Generation Equipment Design

Artificial intelligence is not just driving demand for chips; it is also fundamentally changing how semiconductor manufacturing equipment is designed and operated. Equipment makers and fabs are increasingly embedding AI and machine learning algorithms into their processes for applications like predictive maintenance, real-time process control, and advanced defect detection. This integration is crucial for optimizing yield and efficiency in the face of ever-increasing process complexity, especially at advanced nodes.

This creates a powerful feedback loop. As chip designs for AI become more complex, the manufacturing process generates massive datasets that can be used to train AI models for process optimization. Consequently, a key competitive differentiator for the next generation of manufacturing tools will be their ability to intelligently analyze data and self-optimize. This pushes R&D in the semiconductor manufacturing equipment market towards creating smarter, more autonomous systems capable of handling the stringent requirements of sub-2nm production.

Market Leaders Face a Bifurcated Reality of Booming and Slowing Demand

While the AI-driven supercycle fuels record investment, the broader semiconductor manufacturing equipment market presents a more complex picture, forcing equipment leaders to navigate divergent trends. For instance, while AI and HPC demand is robust, capital expenditure in other areas is softening. Samsung announced a 50% cut in its 2025 foundry capex to US$ 3.5 billion, and Intel's 2025 investment of around US$ 20 billion is lower than initial forecasts. This bifurcation requires equipment suppliers to be agile in their resource allocation and product strategy.

At the same time, geopolitical factors are actively reshaping revenue streams. Lam Research, while posting record revenues of US$ 5.3 billion in its September quarter, anticipates its revenue share from China will decline to less than 30% in 2026 due to regulatory pressures. The company's December 2025 guidance already accounts for a US$ 200 million revenue impact from new U.S. trade rules. Navigating this complex environment of booming niche demand, slowing traditional markets, and regulatory headwinds is the central challenge for leaders in the semiconductor manufacturing equipment market.

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Semiconductor Manufacturing Equipment Market Major Players:

• Tokyo Electron Limited
• Lam Research Corporation
• Asml Holdings N.V.
• KLA-Tencor Corporation
• Screen Holdings Co., Ltd.
• Applied Materials Inc.
• Teradyne Inc.
• Hitachi High-Technologies Corporation
• Plasma-Therm
• Rudolph Technologies, Inc
• Advantest Corporation
• Startup Ecosystem
• Other Prominent Players

Key Market Segmentation:

By Type

• Front-end Equipment
• Backend Equipment

By Application

• Automation
• Chemical Control Equipment
• Gas Control Equipment
• Others

By Region

• North America
• Europe
• Asia Pacific
• Middle East & Africa (MEA)
• South America

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