Taiwan is still the country that buys the most chip materials.
In 2023, the global semiconductor materials market revenue decreased by 8.2% to a total of $66.7 billion, down from $72.7 billion in the previous year. All regions of the world saw a decline in income, but China saw some growth. SEMI, the global electronics manufacturing and design supply chain industry association, reported the decline.
The decline in revenue is seen in different areas of the market. Revenue from wafer fabrication materials fell 7.0% to $41.5 billion. The largest declines in this area were in silicon, photoresist auxiliary materials, wet chemicals, and chemical-mechanical planarization (CMP). At the same time, packaging materials used to manufacture chip packages fell even more by 10.1%, and revenue fell to $25.2 billion, mainly due to a decrease in the organic substrate segment.
The global chip materials market is declining in 2023, with China being the only country to see growth
The reason for the shrinking market size is that manufacturers tried to reduce their remaining inventories last year due to weak demand for semiconductors. This inventory management leads to underutilization of wafer fabrication facilities, which directly impacts the consumption of semiconductor materials. The reduced operating rate of these facilities is a key factor in the reduction in material use.
The global chip materials market is declining in 2023, with China being the only country to see growth
Geographically, Taiwan is the largest consumer of semiconductor materials for the fourteenth consecutive year, with revenues reaching $19.2 billion. This is not surprising, as Taiwan-based TSMC produces chips for tech giants around the globe, such as Apple, AMD, Intel, and Nvidia.
Taiwan was followed by China, with increased consumption and revenues reaching $13.1 billion, and maintaining its second position. Considering that China is a world leader in building new fabs, it is logical that Chinese companies buy more semiconductor materials than other countries.
South Korea ranks third at $10.6 billion, which is not surprising given that companies like Samsung and SK hynix produce most of their 3D NAND and DRAM memory devices domestically.
The global chip materials market is declining in 2023, with China being the only country to see growth
With the exception of these countries, most other regions have experienced a significant decline in semiconductor material consumption. Most notably, the North American chip materials market totaled $5.561 billion last year, a contraction of 11.4%, which is not surprising as the U.S. continued to lose market share in chip manufacturing last year. The only smaller market is Europe, which was $4.319 billion in 2023, down 5.7% year-over-year.