Wafer Fabrication Market Research Report - Global Forecast till 2030

Impact of COVID-19 on the Wafer Fabrication Market

The key factors that are promoting growth in the semiconductors and circuits manufacturing market in general and in the wafer fabrication market, in particular, include the rising demand for electric and hybrid vehicles and the widespread adoption of modern technologies (AI, IoT, drones & robotics, and cloud computing). The decline in the prices of semiconductors and the high demand for electronics and connected devices act as catalysts for propelling the demand. The global wafer fabrication market is facing the uncertainty of growth and annual wafer shipments due to projections on the continued spread of COVID-19 in 2020. The pandemic has created a decline in shipments of semiconductor wafers for almost three months in 2020 with possibilities to trigger a ripple effect on prices in the coming years.

China is the leading supplier of semiconductor wafers and is also the place where the virus originated. Thus, the utilization of wafers has declined sharply in February 2020 but started recovering around March end. Since then, the state of the market has been fluctuating. This uncertainty has led to shortages in raw material supply, i.e., wafers to original equipment manufacturers, creating a gap in demand-supply equilibrium. Also, the OEMs must comply with strict government regulations and work at reduced capacities. In 2019, continuous demand for small diameter silicon wafers paved the way for new growth opportunities. Also, there are rising expectations regarding normalizing inventory levels, data center growth, improvements in the memory market, and the adoption of 5G technology. Considering the various dimensions of the current industry situation, the semiconductor industry may witness a significant decline in growth as compared to 2019. As per the MRF analysis, the demand for wafer fabrication is expected to bounce back to its initial state in the second quarter of 2021. It is estimated that if the recovery of the overall semiconductor industry starts in the second half of 2020, it will aid in inventory buildup and, thus, promote growth in silicon wafer shipment in the last quarter of 2020.

Impact Analysis