ELECTRONIC CHEMICALS MARKET ANALYSIS

The Electronic Chemicals Market size is estimated to be valued at US$ 67.92 Bn in 2023 and is projected to reach US$ 104.86 Bn by 2030, exhibiting a compound annual growth rate (CAGR) of 6.4% during the 2023-2030 period.

The growth of the electronic chemicals market is driven by the increasing demand for electronic products such as smartphones, tablets, laptops, and televisions (TVs). Rising demand for these products is driving the growth of the semiconductor industry, which is a major consumer of electronic chemicals. In addition, the growing adoption of new technologies such as artificial intelligence (AI), internet of things (IoT), and 5G is also driving the demand for electronic chemicals. These technologies require advanced electronic components that are made by using electronic chemicals.

Electronic Chemicals Market Regional Insights

• North America is the largest market for electronic chemicals, accounting for over 30% of the global market in 2023. The growth of the market in North America is driven by the increasing demand for electronic devices, such as smartphones, laptops, and tablets. The region is also home to a large number of semiconductor manufacturers, which is another major driver of the market growth.
• Europe is the second largest market for electronic chemicals, accounting for over 25% of the global market in 2023. The growth of the market in Europe is driven by the rapid growth of the electronics industry in the region. China is the largest market for electronic chemicals in Asia Pacific, followed by Japan and South Korea.
• Asia Pacific is the third largest market for electronic chemicals, accounting for over 20% of the global market in 2023. The growth of the market in Asia Pacific is driven by the increasing demand for electronic devices, such as automobiles and medical equipment. Germany and France are the largest markets for electronic chemicals in Europe.

Figure 1. Electronic Chemicals Market Share (%), By Region, 2023

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Analyst Viewpoint: The electronic chemicals market is expected to grow steadily over the 2030. This growth is likely to be driven by increasing demand for electronics and semiconductor devices globally. Emerging technologies such as artificial intelligence (AI), 5G, and electric vehicles will increase higher consumption of electronic chemicals. Geographically, the Asia Pacific region, led by China, will continue dominating the electronic chemicals market due  to the presence of a robust electronics manufacturing base.

Electronic Chemicals Market Drivers

• Miniaturization of electronic devices: As devices become smaller and more powerful, the need for precision and high-purity chemicals to facilitate miniaturization grows.

For instance, according to U.N. Comtrade data, the global export of integrated circuits witnessed a substantial 37% growth from 2020 to 2021, highlighting the increasing demand that is fueled by the introduction of new products in diverse industries.

• Advancements in semiconductor technology: Innovations such as 3D NAND, FinFETs, and quantum dots require specialized chemicals and materials.

For instance, according to data provided by the United Nations Conference on Trade and Development (UNCTAD), global semiconductor sales rose by over 25% in 2021 as compared to the previous year, pointing to increased off-take from electronics OEMs and original design manufacturers (ODMs) to meet burgeoning requirements of digital devices, automated equipment, and cloud infrastructure hardware.

Electronic Chemicals Market Opportunities

• Green and sustainable chemicals: With increasing environmental awareness and stricter regulations, there's a growing demand for sustainable and environmentally-friendly electronic chemicals.

For instance, according to the United Nations Environment Programme (UNEP), over 50% of major electronic brands had committed to using more sustainable chemistries or eliminating hazardous substances by 2025, in a report published in 2022.

• Advanced display technologies: The ongoing evolution of display technologies, from OLED to MicroLED and Quantum Dots, presents an opportunity for chemicals tailored for these applications.

For instance, according to data by  the United Nations, global internet usage grew by over 17% year-on-year in 2021 alone. As more people consume online media like movies, games, and social media on devices, there will be greater consumer demand for displays, thus offering an ultra-realistic viewing experience.

Electronic Chemicals Market Trends

• Environmental considerations: There's a growing emphasis on sustainable and eco-friendly chemicals in the electronics sector. Companies are looking for green alternatives and environmentally friendly production methods.

For instance, according to a report surveyed by the World Economic Forum in 2022, chemical logistics companies reported increased demand for their rail and ocean freight services from electronic chemical manufacturers looking to lower transport emissions.

• Growth in OLEDs and advanced displays: OLED and other next-generation display technologies require specialized chemicals for their production. This has increased growth in the market for chemicals catered to these applications.

For instance, in 2022, according to the report provided by the International Data Corporation the shipment of OLED panels for smartphones is estimated to grow over 35% year-on-year between 2022-2023 reaching over 600 million units.

Electronic Chemicals Market Restraints

• Environmental concerns: Many electronic chemicals have environmental implications, leading to stricter regulations and guidelines. These can restrain the production and use of certain chemicals, thus pushing manufacturers to seek alternative materials.

Counterbalance: Adoption of green chemistry principles in the production of electronic chemicals can minimize waste, reduce toxic substances, and save energy. This involves developing processes and chemicals that are environmentally benign from the start.

• Regulatory constraints: Increasing regulatory scrutiny on the chemicals that are used in the electronics industry can impose additional costs on companies and limit the use of certain substances.

Counterbalance: Maintaining an up-to-date understanding of current and upcoming regulations in all markets where the company operates is needed. This can be achieved through dedicated regulatory affairs teams and subscriptions to regulatory updates

Recent Developments

• On December 5, 2023, Merck, a prominent science and technology company, introduced AIDDISON, a groundbreaking drug discovery software. This marks the first-ever software-as-a-service platform that addresses the divide between virtual molecule design and practical manufacturability. AIDDISON™ achieves this integration through the incorporation of the SynthiaTM retrosynthesis software application programming interface (API).
• On September 21, 2023, Dow unveiled a fresh lineup of propylene glycol (PG) solutions in Europe, incorporating alternative feedstocks with lower carbon impact, bio-based sources, and circular production methods. This development enables customers across various industries, including pharmaceuticals, agriculture, and food, to offer end-products with verified sustainability benefits. The use of a mass balance approach, certified by ISCC PLUS, meticulously traces the flow of sustainable raw materials in the (propylene glycol)PG manufacturing process through a complex value chain, providing verifiable and third-party validated sustainability credentials.

Key Strategic Initiatives

• On June 19, 2023, JSR Corporation is delighted to announce the formalization of a partnership agreement with Hokkaido University, also known as Hokudai, is a Japanese national university located in Sapporo, Hokkaido, Japan. As the fifth Imperial University in Japan, it was part of a series of institutions established to serve as the country's premier centers for higher education and research. This collaboration is focused on the manufacturing, sales, and promotion of functional lipids that is designed for lipid nanoparticles, a key component in drug delivery systems.
• In march 2022 A second facility for producing liquid hydrogen has been announced by Air Products and Chemicals (US) in California. The company will be able to meet the demand for hydrogen fuel cell vehicles (FCV) with the aid of this production facility. Additionally, the business has made investments in a pipeline network and six industrial gas plants in China. These plants will provide bulk gases such as oxygen and nitrogen. This expansion will help China's rapidly expanding electronics manufacturing sector.

Figure 2. Electronic Chemicals Market Share (%), By Application, 2023

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Top Companies in Electronic Chemicals Market

• BASF SE
• Air Products and Chemicals, Inc.
• The Dow Chemical Company
• Merck KGaA (known as EMD Performance Materials in North America)
• SUMCO Corporation
• JSR Corporation
• Shin-Etsu Chemical Co., Ltd.
• Cabot Microelectronics Corporation
• Tokyo Ohka Kogyo Co., Ltd.
• Honeywell International Inc.

Definition: The electronic chemicals market refers to the market for specialty chemicals and materials that is used in the manufacturing and processing of electronic components, such as semiconductors, integrated circuits, and printed circuit boards. These chemicals ensure the functionality, performance, and miniaturization of electronic devices.