Vertical Furnace Market

Vertical Furnace Market Outlook 2031:

The Global Vertical Furnace Market was estimated at USD 4,517.5 Million in 2022 and is anticipated to reach USD 8,425.8 Million by 2031, expanding at a CAGR of 7.3% during the forecast period.

Vertical furnace is used to process wafers during the manufacturing of semiconductor devices, including film formation, annealing, and resin film hardening. These furnaces have a quartz tube arranged vertically that heats items placed around it for processing. Wafers are placed into the boats or quartz storage shelves, which are raised and lowered from the bottoms of the tubes.

This kind of furnace offers an excellent distribution of temperatures as well as environment control with little particle production. Moreover, automated vessels and wafer movement enable increased efficiency and production. Vertical furnace has a clean room footprint, and it accommodates wafer loading and produces heat homogeneity. It is preferable in comparison to the conventional horizontal furnaces.

Additionally, it takes up less space overall than a horizontal boiler. Vertical furnaces offer high technological solution with small floor areas and rapid mold transfer rates for the vacuum casting process.

Macro-economic Factors

Rising GDPs of Emerging Economies

GDP has a significant impact on the vertical furnace market. Vertical furnace is mainly used in the semiconductor industry. The semiconductor industry is a key contributor to the global economy, with global chip revenues doubling in importance relative to GDP over the last three decades, from 0.25% of global GDP to over 0.50% in both 2020 and 2021.

This is expected to positively impact the vertical furnace market during the forecast period. Increasing GDP signals an improving economy, which leads to the high demand for semiconductor-enabled products and automotive gadgets, influencing demand for vertical furnaces.

R&D and Other Investments (Expansion/Acquisition)

Research & Development (R&D) investments of a country are driven by GDP of the country. Investments by countries in Asia Pacific are often more than the countries in North America and Europe. Therefore, the combined R&D investments of Asia Pacific are rising at a more rapid rate than other regions.

The global semiconductor industry is experiencing a significant investment boom in the technology segment, with the potential to alter how chips are created seismically. Therefore, these expenditures are projected to have an impact on the vertical furnace industry. Rising demand is being driven by core industries such as automotive, consumer electronics, and data centers, as well as rapid technological breakthroughs such as 5G, artificial intelligence, and the Internet of Things.

In March 2022, the SK Siltron, a South Korea-based semiconductor wafer manufacturer affiliated with SK Group, announced an investment of USD 812 Mn over the next three years to expand its facilities for 300 mm wafers, which are located in Gumi National Industrial Complex 3.

Geopolitics

Semiconductor equipment manufacturers are expected to gain from an expanding market, as the chip geopolitics between China and the US intensifies. The global semiconductor industry is experiencing a significant investment boom, as countries are trying to attract investments in the strategically important sector. It is witnessing the increasing demand from core sectors such as automotive, consumer electronics, and data centers, on the back of advancements in technologies such as 5G, AI, and IoT.

In October 2022, the US announced stringent export controls to impede the access of China to critical technologies. Semiconductors made with US technology cannot be transferred or sold to China without an export license, impacting China-based research in AI, high-performance computing, and supercomputers. The rules also restrict chipmaking tools and technology exports, which are crucial for China-based companies to produce their equipment.

Vertical Furnace Market Dynamics

Market Driver - Increasing Growth of Semiconductor Industry

Semiconductors play a crucial role in consumer electronics, such as smartphones, televisions, digital cameras, refrigerators, and washing machines. According to the Semiconductor Industry Association (SIA), the US semiconductor industry is the worldwide frontrunner, accounting for about half of the global market share and sales of USD 275 billion in 2022.

Furthermore, according to the World Semiconductor Trade Statistics (WSTS) endorsed by SIA, the semiconductor industry is expected to reach USD 588.4 billion in 2024 in terms of sales. The semiconductor industry has grown over the past few years due to the rising demand for innovative technologies. The demand for vertical furnaces is rapidly increasing in several developing and developed nations. Vertical furnaces provide thermal processes, such as diffusion, oxidation, LPCVD, and PECVD, which are used in the production of several communications ICs, sensors, and accelerometers.

Market Driver- Implementation of Government Policies

Government plays an important role in implementing policies that contribute to the economic growth of the country. A policy put into place by the government modifies social behavior in the workplace. The government signs contracts to create new technologies that implement the required adjustments. Production of products and services reduces when private investments decline. This further reduces job opportunities.

The government policies affect the overall growth of the semiconductor industry. Numerous governments worldwide are reevaluating their roles in the semiconductor value chain and attempting to take appropriate action by introducing new national industrial policies and large expenditures for domestic semiconductor manufacturing and R&D.

In recent years, the semiconductor industry has registered government investments of up to USD 250 billion by China, South Korea, and EU over the next ten years. For instance, since 2018, China has funded the construction of more than 52 fabs through a range of support measures, including equity investment, grants, reduced utility rates, favorable loans, and tax breaks. China has announced the establishment of over 15 local IC funds totaling over USD 100 billion, in addition to the USD 50 billion National IC Fund.

These funds are aimed at providing equity to China-based semiconductor companies. The US has proposed a USD 52 billion plan to revive the development and manufacturing of chips. The CHIPS for America Act authorized the provisions of this plan.

Market Restraint- High Cost of the Vertical Furnace

High initial investment and maintenance costs are key restraints in the market. The high cost of vertical furnaces makes them unaffordable for small enterprises in the semiconductor and advanced packaging industry. Therefore, these enterprises opt for horizontal furnaces, which cost comparatively less than vertical furnaces.

Some of the businesses opt for horizontal furnaces due to their certain advantages over vertical furnaces. Vertical furnaces are dynamic systems and require constant flow, which affects their detectors, whereas horizontal furnaces are static combustion systems that do not require a constant flow. The equipment is also subject to strict environmental regulations, which increase operating costs and affect profitability.

Market Opportunity- Increasing R&D

Growth in R&D investments by manufacturers has enabled technological developments in vertical furnaces. These advancements are focused on improvements in thickness uniformity, shortening the process time, and enhancing particle performance.

These advancements in the existing product spectrum are expected to boost the market in the coming years while creating immense opportunities. Many developed and developing nations are focusing on research and development in semiconductors for enhanced and innovative semiconductors and devices.

For instance, the government of India intends to establish the India Semiconductor Research Centre (ISRC) to perform research and development (R&D) in the areas of advanced and next-generation semiconductors, packaging and systems technologies, processes, and materials.

The federal government investments in research and development (R&D) of semiconductors are essential for enhancing existing private sector R&D and encouraging private investment in fresh R&D.

Scope of the Vertical Furnace Market Report  

The report on the global vertical furnace market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
 

Attributes	Details
Report Title	Vertical Furnace Market– Global Industry Analysis, Size, Share, Growth, Trends, and Forecast
Base Year	2022
Historic Data	2016 and 2021
Forecast Period	2023–2031
Segmentation	By Type (Wafer Size: Up To 150mm, Wafer Size: 151mm – 200mm, And Wafer Size: More than 201mm), By Method/Applied Technology (LPCVD, PECVD, Thermal Oxidation, And Others), By Application (Advanced Packaging, Semiconductors, And Others), and By Region (North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa)
Regional Scope	Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Report Coverage	Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered	ASM International N.V., Centrotherm International AG, JTEKT Thermo Systems Corporation, Tempress, and Tokyo Electron Limited, Kokusai Electric Corporation

 

Vertical Furnace Market Segmental Outlook

Based on Type, the vertical furnace market is segmented into wafer size: up to 150mm, wafer size: 151mm – 200mm, and wafer size: more than 201mm. The wafer size: more than 200 segment is projected to expand at a significant CAGR during the forecast period, owing to growing demand for 300mm wafers in diverse industries, including data centers, automotive, PCs, AI, industrial products, and consumer goods.

For instance, according to a report by SEMI, a global association for semiconductor industry, the capacity of 300mm fabs across the globe is expected to reach an all-time high of 9.6 million wafers per month (wpm) in 2026.

The wafer size: up to 150mm segment held a significant market share in 2022, as the growing demand for 150mm wafer in power devices. These power devices are used in various fields such as train, solar power, power transmission, home appliances, and automotive. For instance, in 2020, Sumitomo Electric had launched a 150 mm (6-inch) diameter substrate for SiC power devices, CrystEra, to meet the demand.

Based on the method / applied technology, the global vertical furnace market is segmented into LPCVD, PECVD, thermal oxidation, and others. The PECVD segment is anticipated to hold substantial market share in 2031. Plasma Enhanced Chemical Vapor Deposition (PECVD) is extensively used in the semiconductor industry to fabricate integrated circuits in the photovoltaic, tribological, optical, and biomedical fields. The LPCVD segment held significant market share in 2022, as this process is useful for a wide range of applications.

Liquid Phase Chemical Vapour Deposition (LPCVD) produces silicon oxide, a semiconductor material with excellent dielectric and mechanical properties often used in memory devices, MEMS, and other device. LPCVD is a method for producing high-density and low-temperature deposited oxides. The method produces both metal and semiconductor materials. However, bacterial contamination is a disadvantage of LPCVD.

Based on application, the global vertical furnace market is segmented into advanced packaging, semiconductors, and others. The advanced packaging segment is expected to hold a substantial market share in 2022, as the wafers, whether metal, plastic, ceramic, or glass, are protected from chemical contamination as well as damage from light, heat, and impacts by advanced packaging.

Furthermore, advanced packaging is assisting in meeting the demand for semiconductors that power upcoming applications such as 5G, autonomous vehicles, other internet of thing’s technologies, and virtual & augmented reality.

The semiconductors segment is projected to expand at a significant CAGR during the forecast period. This is attributed to the semiconductor innovation, which enables a variety of disruptive technologies such as artificial intelligence (AI), autonomous electric vehicles, and the internet of things (IoT).

Regional Outlook

On the basis of regions, the global vertical furnace market is segmented into North America, Europe, APAC, Latin America, and the Middle East and Africa. North America is projected to grow at a rapid pace during the forecast period, due to high-tech innovations and increased use of vertical furnaces in various industries, especially semiconductors.

Presence of major players in the region as well as the constant demand in sectors such as automotive, and aviation are projected to drive the market in the coming years.

In June 2020, semiconductor companies announced number of projects to increase manufacturing capacity in the US to expand the domestic semiconductor value chain. The value of US-based semiconductor projects that are under way or under consideration is total USD 223 billion to over USD 260 billion through 2030. Rapid expansion of the automotive industry is also anticipated to drive the market in the region in the coming years.

Europe is expected to account for significant share of the market in 2022. The market in this region is driven by the presence of several automotive manufacturers using automotive semiconductors such as sensors, processors, and power devices. In 2023, Germany funded EUR 20 billion for the growth of the domestic semiconductor industry.

Italy has one of the most competitive and cutting-edge semiconductor industries in Europe, characterized by a network of enterprises carrying out manufacturing as well as research activities of semiconductors. Italy is highly committed to enhancing its strategic role as a key Europe-based hub for the design, manufacturing, assembly, testing, and packaging of semiconductors.

Asia Pacific is projected to expand at a significant CAGR in 2022. The market in the region is growing rapidly. This growth is attributed to the expansion of the semiconductor industry in the region. China holds a significant share of the market. Taiwan, South Korea, and Japan play a critical role in the development of the semiconductor industry in the region.

The semiconductor industry in Asia Pacific is expected to expand its global share to 62% by 2030. Additionally, the market of semiconductors is projected to exceed USD 1 trillion in 2023. In the field of semiconductor materials, Japan-based companies account for more than half of the global market share.

The market in Latin America is anticipated to expand at a considerable CAGR during the forecast period. The demand for vertical furnaces is rising, as these are used in advanced packaging, for improving the device performance.

The market in the Middle east and Africa is anticipated to grow at a substantial CAGR during the forecast period. According to the study of Strategy& Middle East, three products, particularly semiconductors, sensors, and robots for industrial or general-purpose use, are estimated to provide USD 25 billion in revenue by 2025. The UAE intends to raise manufacturing by 30% and the GDP of the country by USD 6.8 billion by 2031. The UAE is also increasing productivity and creating new products. Saudi Arabia is investing in the semiconductor industry.

Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Vertical Furnace Market

• Historical, Current, and Projected Market Size in terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Vertical Furnace market performance

Segments

By Type

• Wafer Size: Up To 150mm
• Wafer Size: 151mm – 200mm
• Wafer Size: More than 201mm

By Metho/Applied Technology

• Liquid Phase Chemical Vapour Deposition (LPCVD)
• Plasma Enhanced Chemical Vapor Deposition (PECVD)
• Thermal Oxidation
• Others

By Application

• Advanced Packaging
• Semiconductors
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Key Market Players Profiled in the Report

• Tokyo Electron Limited
• Kokusai Electric Corporation
• ASM International N.V.
• JTEKT Thermo Systems Corporation
• Centrotherm International AG
• Tempress

Competitive Landscape

• Manufacturers operating in the global vertical furnace market include ASM International N.V., Centrotherm International AG, JTEKT Thermo Systems Corporation, Tempress, Tokyo Electron Limited, and Kokusai Electric Corporation

• Market Players are pursuing key strategies such as acquisitions, collaborations, and geographic expansion where a potential opportunity arises for the vertical furnace market.