Semiconductor Bonding Market Research Report and Outlook by 2028

The semiconductor industry has experienced significant expansion, largely driven by the integration of memory chips, graphics processing units, and 5G chipsets into a variety of devices, including smartphones, personal computers, tablets, and 5G technologies. However, the COVID-19 pandemic led to a downturn in demand for semiconductors within the industrial and automotive electronics sectors in 2020. According to the Semiconductor Industry Association (SIA), global semiconductor sales surged from $204.4 billion in 2000 to $440.4 billion in 2020, effectively doubling over the past two decades. Despite this impressive growth, several factors are constraining market expansion, such as the declining prices of various chip types, reduced demand for smartphones, servers, and PCs, as well as ongoing trade tensions between the United States and China. The US government has enacted numerous restrictions on Chinese companies due to national security issues, with sanctions against Huawei significantly impacting its semiconductor operations. As a result, China's share of the semiconductor market fell from 6.7% in 2020 to 6.5% in 2021, as reported by SIA.

To maintain a competitive advantage, various stakeholders in the semiconductor bonding market are implementing both organic and inorganic growth strategies. A notable instance is ASM Pacific Technology, which unveiled three innovative manufacturing systems in April 2021 that integrate X-Celeprint's Micro Transfer Printing with ASM AMICRA's precision die bonding technology. This combination facilitates the high-volume heterogeneous integration of ultra-thin dies.

Effects of the COVID-19 Pandemic on the North American Semiconductor Bonding Market

Semiconductor firms in North America are navigating the challenges posed by rising costs, supply chain shortages, and extended lead times while striving to meet consumer needs. The US Department of Commerce indicates that the United States holds about 50% of the global semiconductor production market share. Nevertheless, the pandemic has led to a notable decrease in demand for key semiconductor components in North America, with the global semiconductor sector witnessing a 5-15% decline in 2020 compared to the previous year. The pandemic adversely affected US semiconductor companies, which had heavily relied on outsourcing raw materials and labor from China. Conversely, Mexico's telecommunications and automotive industries are experiencing growth, presenting opportunities for players in the semiconductor bonding market. The closure of China's borders resulted in factory shutdowns or reduced output, increased shipping costs, and additional capacity constraints. Consequently, domestic production surged, allowing the US to gain control over the entire supply chain while also raising overall costs. In August 2020, the US government prohibited the sale of semiconductor chips to Huawei, a Chinese multinational corporation. These measures are anticipated to bolster the US semiconductor industry, which is expected to, in turn, stimulate growth in the semiconductor bonding market.

The North American semiconductor bonding market is segmented into the US, Canada, and Mexico. In 2021, the US held the largest market share, while Canada is projected to experience the highest compound annual growth rate (CAGR). The semiconductor sector in North America has benefitted from robust government support, leading to increased investments in the industry. There is a rising demand for 3D semiconductor assembly and packaging solutions in the region. The adoption of advanced technologies, such as the Internet of Things (IoT) and artificial intelligence, particularly in the automotive sector, is also on the rise. Key players in the North American semiconductor bonding market include Robert Bosch GmbH, Allegro MicroSystems, Inc., Texas Instruments Incorporated, Qualcomm Technologies, Inc., InvenSense, and Honeywell International Inc. The increasing demand for MEMS and sensors in the region offers numerous opportunities for manufacturers of die bonders, wafer bonders, and flip-chip bonders.

In the US, the demand for semiconductor bonding is primarily driven by its application in consumer electronics, medical devices, automotive, and other sectors. The robust sales of vehicles in the country have further propelled the growth of the semiconductor bonding market. Major automotive manufacturers have committed billions of dollars to electric and autonomous vehicle development, with GM announcing a $35 billion investment by 2025. Additionally, the US government has pledged to invest $50 billion in the semiconductor industry to lessen its reliance on China. Furthermore, a visit by the Arizona government to Taiwan in August 2022 focused on the semiconductor industry for everyday electronic devices. These governmental initiatives are expected to enhance the demand for semiconductor bonding in the US.

In Canada, the anticipated increase in housing demand due to population growth is expected to drive the need for household electronic products, subsequently boosting the demand for semiconductors. The rapid adoption of devices such as smartphones, tablets, televisions, and personal computers is also contributing to the rising demand for semiconductor bonding. Canada boasts 15 free trade agreements with 51 countries, providing semiconductor chip manufacturers access to a combined GDP of $49.3 trillion and 1.5 billion consumers. The country is home to several leading semiconductor companies, including TSMC, Samsung Electronics, AMD, Qualcomm, and Intel. Thus, the growing demand for smart electronic devices, coupled with government initiatives, is propelling the growth of the semiconductor bonding market in Canada.

Prominent players in the semiconductor bonding market include Palomar Technologies, Panasonic Corporation, Toray Industries Inc., Kulicke & Soffa Industries, Inc., HUTEM, DIAS Automation (HK) Ltd, ASMPT Ltd (formerly ASM Pacific Technology Ltd.), EV Group, Yamaha Motor Corporation (Yamaha Robotics Holdings), and WestBond, Inc.

The analysis of the semiconductor bonding market has employed both primary and secondary research methods to ascertain the overall market size and growth trajectory. This process commenced with extensive secondary research utilizing both internal and external sources to collect qualitative and quantitative data regarding the semiconductor bonding market. The objective of this research was to provide a comprehensive overview and forecast of market growth across all segments. Additionally, to validate the findings and gain analytical insights, numerous primary interviews were conducted with industry experts, including VPs, business development managers, market intelligence managers, national sales managers, and external consultants such as valuation experts, research analysts, and key opinion leaders specializing in the semiconductor bonding market.