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The wet chemicals market for electronics and semiconductor applications is expected to grow at a CAGR of 6.36% during the forecast period of 2019-2024.
Rising demand from modern technology industries and surging demand for hydrogen peroxide from the semiconductor industry are expected to drive the growth of the market studied. However, sudden dip in the semiconductor industry and waste management of semiconductors are anticipated to hinder the growth of the market studied.
By product type, the hydrogen peroxide segment accounted for the largest share of 25%, in 2018. By geography, Asia-Pacific dominated the global market. In 2018. It also expected to register the fastest CAGR of 7.05% over the forecast period.
Key Market Trends
Increasing Demand for Hydrogen Peroxide
- The hydrogen peroxide chemical is estimated to hold the highest share in the global market, on account of its extensive use in the semiconductor industry as a wet chemical, from the long-established applications in the etching of printed circuit boards to the more recent application of ultra-high purity grades in the semiconductor production.
- 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. The main application of hydrogen peroxide in the electronics industry include:
- In the first step of RCA cleaning, it is used with ammonia (removal of organic impurities and particles on wafers)
- In the third step of RCA cleaning, it is used with hydrochloric acid (removal of metallic impurities on wafers)
- Finally, with sulfuric acid in piranha acid, for residual organic film removal
- High purity hydrogen peroxide is a key chemical in the manufacturing of semiconductor chips. The demand for ultra-pure hydrogen peroxide increases with the increase in the complexity of computer chips and the miniaturization of circuits in them.
- Due to rapid expansion in the electronics industry, the demand for electronic chemicals used to clean and etch large-scale integrated circuits and semiconductors has also surged. To offset that demand, companies have started investing in new hydrogen peroxide production plants.
- For instance, in 2018, Solvay announced to open a new electronic grade hydrogen peroxide plant in China. With an annual capacity up to 24,000 metric ton, the new facility is likely to supply the semiconductor industry with an essential chemical agent for the production of integrated electronic circuits.
- All the aforementioned factors, in turn, are expected to increase the demand for wet chemicals in the electronics and semiconductor applications.
Asia-Pacific to Dominate the World Market
- Asia-Pacific region dominated the global market share in 2018. With growing demand for the electronics in the 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 behind. Currently, China is the net importer of semiconductor chips with China manufacturing less than 20% of semiconductors used. As part of the country's ambitious Made in China 2025 plan, the Chinese government has announced their decision to reach output of USD 305 billion by 2030, and therefore meet 80% of its domestic demand. In 2018, China imported semiconductor chips worth USD 312 billion.
- Similarly, over 90% of the IC's that are currently being used by China are either imported or domestically manufactured by foreign chipmakers. In 2018, the total imported volume of integrated circuits in China was about 417.60 billion units, representing an increase of 10.80% Y-o-Y over 2017. The total imported value of these integrated circuits was about USD 312.06 billion, representing an increase of 20% Y-o-Y over 2017.
- The Chinese government has declared to invest above USD100 billion over the following decade to catch up with the United States in semiconductor technology. Some of the cities which have announced their plans for the production facilities for semiconductors include Chongqing, Shanghai, Beijing, Chengdu, Hefei, Shenzhen, Wuhan, Xiamen and Liaoning, and Shaanxi. Therefore with the establishment of new semiconductor manufacturing facilities, the demand for wet chemicals is expected to rapidly increase over the forecast period.
- The aforementioned factors are contributing to the increasing demand for wet chemicals consumption in the region during the forecast period.
The wet chemicals market for electronics and semiconductor applications is highly concentrated, with top five players accounting for over 60% of the market share in 2018. Major players in the market include KMG Chemicals, BASF, Avantor, Honeywell International, and KANTO Chemical Co, amongst others.