Semiconductor Plastics 2H25: Making Sense of the Industry

Plastics into the Semiconductor market are driven through three key buying points: Semiconductor Capital Equipment, Facilities and infrastructure, such as fab construction, and Back End Test. These three segments of the market used to be relatively easy to predict. Like an EKG, the demand line would go up and down year to year with generally small changes in each direction, with the general long-term demand always increasing steadily. This is because the apex of demand generation in these segments is IC Chip revenues.

Expectations changed in 2020–21 with a jump of 35% in IC chip revenues. This sudden jump created a new perception as the plastics supply chain struggled to keep up with demand. After a correction in 2023, the market became confused about how to plan for the future. The good news is that much of the plastics supply chain expanded capacity and developed tools to prepare to react to future growth.

Future Demand for Plastics: Market Drivers

To look at the future demand for plastics, let’s look at the individual drivers:

IC Chip Revenues

• In 2024, IC chip revenues reached $624 billion, an 18% growth YOY.
• In 2025, they are forecasted to grow to $705 billion (13% growth).
• By 2030, the industry is expected to exceed $1 trillion.

The key point is that the ultimate driver for the semiconductor industry is very healthy.

Infrastructure and New Fabs

In 2025, there are 18 new chip fabs projected to start construction. These new fabs drive both infrastructure materials and new equipment. (This does not include the 48 projects to build or retrofit fabs scheduled to start in 2024.)

Capital Equipment

The capital equipment market continues to be a steady growth industry. After a 17% drop in revenue in 2023, the industry recovered to $107 billion in 2024 — a 28% growth globally. 2025 is forecasting a modest 2% growth, followed by an 18% growth to $130 billion in 2026. A significant portion of this growth will be in Southeast Asia as the industry spreads its footprint to satisfy global customers. Equipment (aka: Process Tools) is driven not only by increased chip demand, but the technological changes of the devices’ miniaturization, such as found in AI sub-3-nanometer chips.

Back End Test

Back End Test is driven by chip volumes, chip varieties, and technology changes. This smaller, unique market is constantly challenged by what polymers can do to keep up with the decreasing features, but it remains a very attractive market for selling high-end plastic materials.

New Semiconductor Fabs Starting Construction in 2025 by Region

• China: 4
• Americas: 4
• Europe & Mideast: 3
• Japan: 4
• Korea: 1
• Southeast Asia: 1
• Taiwan: 2

Source: SEMI World Fab Forecast, Q4 2024 Update