Summary

The wet chemicals market for electronics and semiconductor applications was estimated at over USD 1.4 billion in 2020, and the market is projected to register a CAGR of more than 6.5% during the forecast period (2021-2026).

The wet chemicals market for electronics and semiconductor applications was hampered by the COVID-19 pandemic. Due to lockdowns in various countries and social distancing measures, the consumption of electronic products increased. According to JEITA, the production of global electronics products such as laptops, mobiles, and semiconductors, among others, and information technology increased, and this is expected to reach USD 3,175 billion by the end of 2021, which, in turn, has positively impacted the demand in the wet chemicals market for electronics and semiconductor applications.

Key Highlights
Over the medium term, rising demand from modern technology industries and surging demand for hydrogen peroxide from the semiconductor industry are expected to drive the market's growth.
However, on the flip side, waste management of semiconductors is anticipated to hinder the market's growth.
By product type, the hydrogen peroxide segment dominated the overall market.
By geography, Asia-Pacific dominated the global market. It is also expected to register the fastest CAGR over the forecast period.


Key Market Trends

Increasing Demand from Semiconductor Application


Wet chemicals are extensively used in semiconductors for cleaning and etching processes. The cleaning process refers to removing contaminants from the wafer surface and controlling chemically grown oxide on the wafer surface. The types of contaminants available could be particles, inorganic and organic compounds, and impurities. Wet etching is an etching process of solid materials in a chemical solution. Wet etching is a process of using etchants or liquid chemicals to take off the substrate material.
The electronic grade hydrogen peroxide has prime application in the semiconductor industry, which has grown significantly in the past years and is likely to create growth opportunities for electronic grade hydrogen peroxide in the coming years. Consequently, hydrogen peroxide is considered to be one of the significant growth drivers for the semiconductor industry, which is, therefore, likely to increase the demand for wet chemicals during the forecast period.
The manufacturing and processing of semiconductor wafers mainly involve wet chemistry steps, where hydrogen peroxide (H2O2) is used in combination with other chemicals for cost-effective cleaning and etching.
According to the Semiconductor Industry Association (SIA), the global semiconductor industry sales were USD 439.0 billion in 2020, an increase of 6.5% compared to the 2019 total of USD 412.3 billion, which led to an increase in demand for the wet chemicals market for electronics and semiconductor applications.
The United States is a significant country in the designing and manufacturing of the semiconductor industry. Investments in the country by major players are set to fuel the semiconductor market, which, in turn, will stimulate the growth of the wet chemicals industry.
For instance, five leading firms formed the US-based consortium to pursue the transition to 450 mm wafers. The consortium includes some major firms, such as Intel, IBM, Taiwan Semiconductor Manufacturing Company, Samsung, and Global Foundries. This consortium focuses on developing and manufacturing the required equipment to process 450 mm wafers. The increase in wafer sizes will be one of the key trends, which will gain traction in the semiconductor wafer polishing and grinding equipment market over the forecast period.
Germany is the largest semiconductor chip manufacturer in Europe. It is estimated that one in every three semiconductors manufactured in the European region is manufactured in Germany. German semiconductor manufacturer, Infineon Technologies AG, started the volume production for Easy 1B, the first full-SiC module. The company is also showcasing additional module platforms for the 1200 V CoolSiC MOSFET family. The new 1200 V SiC MOSFET has been optimized to combine high reliability with performance.
All the aforementioned factors, in turn, are expected to increase the demand for wet chemicals in electronics and semiconductor applications.


The Asia-Pacific Region is Expected to Dominate the Market


The Asia-Pacific region dominated the global market share. With the growing demand for electronics in countries, such as China, India, and Japan, the usage of wet chemicals is increasing in the region.
The semiconductors market in China is currently lagging. Currently, China is the net importer of semiconductor chips, with China manufacturing less than 20% of the semiconductors used. As part of the country’s ambitious “Made in China 2025” plan, the Chinese government has announced its decision to reach an output of USD 305 billion by 2030, and therefore meet 80% of its domestic demand.
Similarly, over 90% of the IC’s that China is currently using are either imported or domestically manufactured by foreign chipmakers.
The Chinese government declared to invest above USD 100 billion over the following decade to catch up with the United States in semiconductor technology.
According to the India Electronics and Semiconductor Association, the semiconductor component market in the country is expected to be worth USD 32.35 billion by 2025, displaying a CAGR of 10.1% over the forecast period. Moreover, the government's ongoing Make In India initiative is expected to result in investments in the semiconductor industry in the country.
Also, Japan currently has about 30 semiconductor fab industries involved in manufacturing various semiconductor chips. Japan’s semiconductor supply chain provides one-third of the world’s semiconductor manufacturing equipment and more than half of the industry’s materials.
Various chip manufacturers across Japan have reduced the production to avoid excess inventories amid uncertainties stemming from China-US trade frictions.
Hence, the market scenario in the region is expected to boost the overall demand in the wet chemicals market through the forecast period.


Competitive Landscape

The wet chemicals market for electronics and semiconductor applications is highly concentrated, with the top five players accounting for over 60% of the market share. Major players in the market include KMG Chemicals, BASF SE, Avantor Inc., Honeywell International Inc., and KANTO KAGAKU, among others.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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