Semiconductor & Chip Market Outlook

Next-Gen Technologies Fuel Global Silicon Chip Growth and Throughput Demand

The global wafer shortage that began in 2020 has declined in 2024 and 2025. However, demand dynamics are shifting. While commercial chip and legacy device demand decreased in 2023 and 2024, next-generation applications like AI and data centers are driving strong growth.

Revenue growth in the semiconductor industry is still uneven. While the overall market is recovering, the bulk of growth is concentrated in AI technology, such as gen AI chips that are expected to generate over $150 billion in sales in 2025 and continue climbing in 2026. Analysts anticipate the global silicon wafer market alone will grow to $14.6 billion in 2025 and is projected to reach $20.2 billion by the end of 2030, supported by investments in advanced packaging, larger wafer sizes for AI, and data infrastructure.

Semiconductor Applications

While silicon chips are used in a variety of products and electronic devices, the highest growth segments for applications using these components are healthcare, manufacturing, nanotechnologies, aerospace, and defense.

Adding to revenue projections for this segment—and driving the shortage of semiconductors—is the exponential growth in demand for mobile phones, wireless communication devices, and AI-powered technologies. This market demand is increasing the prices for these products and consequently increasing revenues for this segment.

The adoption of automated manufacturing and quality assurance processes, artificial intelligence, and machine learning in many industries, along with the mass adoption of automated systems requiring processors with high computing power, is also creating higher demand and raising revenue projections. 300 mm wafers are continuing to be more lucrative, as they are typically utilized in markets outside of personal computing devices, while the 200 mm wafer supply still sees challenges. But the use of wafers is still increasing rapidly over the next several years.

Silicon Wafer Production Challenges

Shortages of silicon chips and the limited supply of raw silicon are only part of the challenge. Rigid SEMI standards make the manufacturing process for silicon wafers even more complex, leaving little room for flexibility as applications evolve. In addition, the high production costs of producing semiconductor wafers pose major challenges to the capacity of manufacturers to expand their operations, further stifling the availability of these critical components. To meet demand, wafer reclaim has surged as a critical strategy to help bridge the gap for these essential components.

Geography’s Effect on the Shortage

The geographic location of silicon wafer manufacturers and the companies that use them may amplify the market impact of the shortage, considering that many of the largest and highest-producing silicon chip foundries are located in the Asia Pacific region. Much of the output produced in this area is used domestically, therefore, even if global increases in the supply are reported, they may not impact the ability of manufacturers in other areas of the world to utilize it to produce additional products in their local markets.

The Role of Non-Contact Measurement Technology

Given the opportunity for additional revenue from increased demand amid the limited supply for many products incorporating silicon chips, fabricators must focus on maximizing output with the raw materials they have and minimizing waste at every step of a complex fabrication process. The implementation of advanced non-contact thickness measurement tools may hold the key.

Applying advanced metrology tools during wafer fab increases the accuracy and precision of wafer measurement. These applications allow quality teams to measure microscopic ranges of variation in products at the nanometer scale—even down to sub-nanometer dimensions. This technology can help minimize packaging and patterning issues, resulting in less waste and higher yield. Solutions like OptiGauge II offer potential applications beyond basic thickness measurement, including bond void detection, total thickness variation (TTU), and wafer bow analysis—critical factors for ensuring wafer integrity and performance.

Overall, higher-quality silicon wafers produced at a higher volume will serve to stabilize and increase profit margins by decreasing write-offs from sub-spec wafer fabrication, helping companies conserve their semiconductor inputs and use the inventory they can create to meet the growing market demand for their products.

For more in-depth details, read Lumetrics’ latest app note: Silicon Wafer Measurement

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