Electronic Materials & Chemicals Market size is forecast to reach $85 billion by 2025, after growing at a CAGR of 6.5% during 2020-2025. Increasing demand for electronic devices across various end-use industries has boosted the use of various chemicals like hydrogen peroxide, ammonia, hydrogen chloride etc. in the production of semiconductors and printed circuit boards. Surging use of photovoltaic cells for power generation accelerated the demand of silicon wafer which in turn augments the growth of electronic materials & chemicals market. Chemical such as Sulphuric acid is also used as an electrolyte in batteries and increase in demand of batteries for electric vehicles is likely to boosts the growth of the electronic materials and chemicals market. However, European Union (EU), legislation restricting the use of hazardous substances in electrical and electronic equipment may hamper the growth of electronic materials & chemicals market.
Type - Segment Analysis
Electronic Materials segment holds the largest share of more than 55% in the electronic materials and chemicals market in 2019 and is projected to grow with a substantial rate during the forecast period owing to the growing uses of silicon wafers like IC’s and semiconductor components across various industry verticals. As, silicon wafers are thin slice of semiconductor made up of crystalline silicone and is used in fabrication of integrated circuits and semiconductors. For instance, according to the United States Census Bureau, the U.S export of semiconductors to China rose by 28%, accounting for $9,113,628 in 2019. Furthermore, the use of pure oxygen forms a thin layer of oxide on the silicon wafers which is used as part of the photolithography and etching process. Whereas the growing demand for silicon wafers for manufacturing computers, mobile phones, and electronic chips has boosted the use pure oxygen for layer formation.
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Application – Segment Analysis
Printed Circuit Boards segment held the largest share of more than 25% in the electronic materials and chemicals market in 2019. The growing uses of wet chemicals as an oxidizing and cleaning agent in the manufacture of semiconductors and printed circuit board drives the market growth. Moreover, an increase in demand for electronic appliances increases the use of printed circuit boards which further propels the growth of electronic materials. According to the Industry association for Printed Circuit Boards (IPC), total North American printed circuit board shipments in April 2019 increased by 6.6% compared to April 2018, subsequently fueling the growth of electronic materials and chemicals market. Also, according to trade map, Japan imported 20.518 billion units of electronic integrated circuit accounting for $ 18.52 Million in 2019.
Geography - Segment Analysis
Asia Pacific dominated the electronic materials and chemicals market with a share of more than 45% in 2019 followed by North America and Europe. Rapid industrialization and urbanization are driving the growth of electronic materials and chemicals market in developing nations. According to National Investment Promotion and Facilitation Agency, India’s share in global electronics manufacturing has grown from 1.3% in 2012 to 3.0% in 2018 and anticipated to reach $400 Bn by 2025. Increasing use of photovoltaic solar panels to meet the power requirement of growing population has also augmented the growth of electronic materials and chemicals market. According to International Renewable Energy Agency (IRENA), Asia dominated the global solar capacity expansion with a 56 GW increase and accounted for about 60% of the total in 2019. Furthermore, government’s National Policy on Electronics 2019 (NPE) for making India as a global hub for Electronics System Design and Manufacturing also aids the growth of electronic materials and chemicals market.
Drivers – Electronic Materials and Chemicals Market
Surging demand of robots for automation work
The surging uses of Robots in the manufacturing industry for increasing the productivity and efficiency while lowering the production costs drives the growth of this market. Increase in demand of robots has increased the use of silicon wafers for semiconductors and printed circuit boards. According to the International Federation of Robotics, robot sales increased by 30% to 381,335 units in 2017 while robot sales in the automotive industry increased by 22% and remained the major customer of industrial robots with a share of 33% of the total supply in 2017. In addition, the rollout of 5G and Internet of Things (IoT) are expected to drive semiconductor industry which in turn propels the growth of electronic materials and chemicals market.
Growing demand of solar cells for power generation
The increase in environmental concerns and volatile prices of oil and natural gas, the demand for solar photovoltaic cells for renewable and cost-effective power production is growing from commercial, industrial, and residential sectors. Accelerating use of photovoltaic solar cells has raised the demand of semiconductors which in turn boosted the growth of electronic materials and chemicals market. According to International Energy Agency (IEA), solar PV generation increased by 31% in 2018 and represented the largest absolute generation growth of more than 136 TWh of all renewable technologies. In addition, technological advancements for improving the efficiency of solar cells may also fuels the growth of market.
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Challenges – Electronics Materials and Chemicals Market
Harmful effects on human health and fluctuation of chemicals prices
Exposure to harmful materials such as lead, cadmium, chromium, brominated flame retardants or polychlorinated biphenyls used in semiconductor manufacturing cause serious health issues. Sulfuric acid which is used in cleaning and etching of semiconductors and PCBs is highly corrosive and can cause severe skin burns, and irritate the nose whereas chemicals such as tetramethyl ammonium hydroxide and dimethyl sulfoxide (DMSO) which are used in the process of making TFT-LCDs solvents may cause heart disease and respiratory failure. Volatility in prices of chemicals has also impacted the growth of electronic materials and chemicals market. For instance, in October 2019, Arkema has raised price for its hydrogen peroxide range by $ 33.65/DMT to cover increasing electricity and labor costs.
Emergence of COVID-19
Coronavirus has badly affected the growth of electronic materials and chemicals markets. Manufacturing units are shuttered all around the world, supply chains have been disrupted and people stuck in their houses due to lockdown. Coronavirus has resulted in decrease in purchasing capital which in turn impacted the sales of electronic equipment’s. According to the Cellular & Electronic Association of India, the lockdown would lead to a lack of $1309.2 Mn to $1963.8 Mn in 2020. Thus, decreases in sales of electronic products has hampered the growth of electronic materials and chemicals market.
Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the electronics materials and chemicals market report. Major players in the electronic materials and chemicals market are Linde Plc., Air Products and Chemicals, Inc., DuPont de Nemours Inc., Cabot Microelectronics Corporation, BASF SE, Hitachi Chemical co., ltd., Solvay S.A, Evonik Industries AG, Eastman Chemical Company, Zhejiang Kaisn Fluorochemical Co. Ltd., Technic Inc., among others.
Acquisitions/Technology Launches
In November 2018, Indian Peroxide Limited (IPL), expanded its business by establishing 125TPD hydrogen peroxide plant complex in Gujarat, India which produces hydrogen peroxide in 35%, 50%, and 60% concentration.
In May 2018, BASF started operations at its newly built electronic-grade sulfuric acid plant in Jiaxing, China. It produces highest quality sulfuric acid (H2SO4) used in semiconductor manufacturing processes to meet the growing demand from semiconductor industry in China.
Key Takeaways
Chinese government “Made in China 2025” plan to boost the high value products and services, like aerospace and semiconductors, to help achieve independence from foreign suppliers is likely to boost the growth of electronic materials & chemicals market.
Trade war between the U.S and China has hampered the growth of electronic materials and chemicals market. According to Industry Association for Printed Circuit Boards (IPC) and electronic manufacturers were seen tariff increase on 31 percent of the total dollar value of the imported products.
Increasing demand for gaseous materials for manufacturing LEDs, solar photovoltaic, and flat panel displays is also driving the growth of electronic materials and chemicals market.
Outbreak of coronavirus has postponed the deliveries and stopped the production of electronic devices which in turn lowered the growth of electronic materials and chemicals market.
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