Global Advanced Deposition & Etch Equipment Market for Next-Gen Logic and Memory (2nm–5nm)

Key Findings

• The market focuses on advanced deposition and etch tools required to manufacture logic and memory devices at 2nm–5nm technology nodes.

• Atomic-level precision in film thickness and pattern transfer is critical at these nodes.

• Gate-all-around (GAA), nanosheet, and advanced FinFET architectures drive equipment complexity.

• Memory scaling for DRAM and advanced NAND increases reliance on high-aspect-ratio etch and conformal deposition.

• Process window tightening significantly raises equipment performance requirements.

• Yield sensitivity increases sharply at sub-5nm nodes.

• Equipment innovation is increasingly tied to materials science advances.

• Capital intensity and long qualification cycles characterize the market.

• Leading foundries and IDMs dominate early adoption.

• The market is strategically critical for semiconductor scaling beyond traditional lithography gains.

Advanced Deposition & Etch Equipment Market Size and Forecast

The global advanced deposition and etch equipment market for next-gen logic and memory (2nm–5nm) was valued at USD 34.6 billion in 2025 and is projected to reach USD 79.8 billion by 2031, growing at a CAGR of 14.8%. Growth is driven by aggressive node transitions in leading-edge logic and continued DRAM scaling.

Deposition and etch steps increase disproportionately at advanced nodes. Equipment spending rises faster than wafer volume growth. Yield learning and process complexity sustain multi-year demand. Long-term expansion is reinforced by AI and HPC semiconductor investment.

Market Overview

The advanced deposition and etch equipment market encompasses atomic layer deposition, chemical vapor deposition, physical vapor deposition, and advanced plasma etch systems used in 2nm–5nm semiconductor manufacturing. These tools enable precise material placement and removal at angstrom-level control. Advanced logic architectures such as GAA and nanosheets require new deposition chemistries and etch selectivity. Memory manufacturing demands extreme aspect ratio processing and defect control. Equipment capability directly impacts yield and device performance. The market serves leading foundries, IDMs, and memory manufacturers pursuing advanced-node roadmaps.

Advanced Deposition & Etch Equipment Value Chain & Margin Distribution

Advanced Deposition & Etch Equipment Market By Process Application

Advanced Deposition & Etch Equipment – Manufacturing Readiness & Risk Matrix

Future Outlook

The advanced deposition and etch equipment market is expected to grow steadily as semiconductor manufacturers push toward 2nm and beyond. Process steps will continue to multiply, increasing equipment intensity per wafer. Tool innovation will focus on selectivity, uniformity, and defect control. Co-optimization with materials suppliers and foundries will deepen. Capital spending will remain concentrated among leading manufacturers. Long-term growth is anchored in AI, HPC, and advanced memory demand.

Advanced Deposition & Etch Equipment Market Trends

• Transition To Atomic-Scale Process Control At Sub-5nm Nodes
  Device dimensions at 2nm–5nm require angstrom-level accuracy. Deposition thickness variation directly affects transistor performance. Etch selectivity becomes extremely critical. Process windows narrow significantly. Equipment precision requirements escalate. Defect tolerance declines sharply. Atomic-scale control becomes mandatory. Tool capability defines node success.

• Rising Adoption Of Gate-All-Around And Nanosheet Architectures
  GAA and nanosheet designs replace traditional FinFETs. These architectures require complex deposition stacks. Etch processes must be highly selective. Conformality becomes essential. Equipment customization increases. Yield sensitivity rises. Architecture shifts reshape equipment demand. Logic scaling depends on tool innovation.

• Increased Materials Complexity In Logic And Memory Devices
  Advanced nodes use novel metals and dielectrics. Materials compatibility challenges intensify. Deposition chemistry diversity expands. Etch recipes must avoid damage. Tool flexibility becomes critical. Materials innovation drives equipment upgrades. Process integration complexity rises. Materials science drives market evolution.

• Higher Equipment Utilization In Advanced Memory Manufacturing
  DRAM scaling relies heavily on etch depth and uniformity. Aspect ratios increase rapidly. Deposition cycles multiply. Memory fabs require sustained tool uptime. Equipment throughput becomes strategic. Yield learning extends cycles. Memory intensity supports demand. Utilization drives recurring revenue.

• Tight Coupling Between Lithography And Etch Processes
  Pattern fidelity depends on post-lithography etch precision. Overlay errors compound at advanced nodes. Etch compensation techniques increase. Co-optimization with EUV is required. Tool integration complexity rises. Process tuning becomes iterative. Litho-etch interaction defines yield. Collaboration intensifies.

• Growing Importance Of Selective Deposition Techniques
  Selective deposition reduces patterning steps. Process simplification improves yield. Tool capability differentiates suppliers. Defect reduction is significant. Integration challenges remain. Selectivity control is difficult. Adoption accelerates at advanced nodes. Selective processes reshape workflows.

• Extended Qualification And Ramp-Up Cycles At 2nm Nodes
  Advanced nodes require extensive validation. Tool qualification timelines lengthen. Yield learning is slower. Capital is locked longer. Supplier-customer collaboration deepens. Early tool stability is critical. Ramp-up risk increases. Qualification affects revenue timing.

• Concentration Of Demand Among Leading Foundries And IDMs
  Only a few players operate at 2nm–5nm. Equipment demand is highly concentrated. Customer bargaining power is high. Long-term supply agreements dominate. Volume visibility improves. Competitive entry barriers rise. Supplier dependence increases. Market structure tightens.

Market Growth Drivers

• Aggressive Scaling Of Leading-Edge Logic Nodes
  Foundries are racing toward 2nm production. Advanced deposition and etch steps multiply. Tool intensity per wafer increases sharply. Performance gains justify investment. Node competition accelerates spending. Yield improvement requires better tools. Equipment upgrades become unavoidable. Logic scaling structurally drives demand. Roadmap commitments sustain growth. Competitive pressure reinforces investment.

• Rising AI And HPC Semiconductor Demand
  AI and HPC chips require leading-edge nodes. Performance and power efficiency are critical. Advanced processes enable higher transistor density. Deposition and etch precision impacts yields. AI investment drives fab expansion. Capacity additions sustain equipment demand. Advanced nodes become mainstream. AI workloads structurally support growth. Data center spending reinforces demand. Compute intensity accelerates scaling.

• Memory Scaling Challenges In DRAM And NAND
  Memory density growth relies on etch depth and uniformity. Aspect ratios increase complexity. Advanced deposition improves reliability. Memory fabs invest in tool upgrades. Yield sensitivity increases at scale. Process innovation becomes essential. Equipment replacement cycles shorten. Memory scaling drives sustained demand. Advanced memory nodes require premium tools. Storage growth reinforces investment.

• Increasing Process Complexity And Step Count
  Advanced nodes require more process layers. Each layer adds deposition and etch steps. Tool utilization increases. Process redundancy rises. Yield learning requires iteration. Complexity inflates capital spending. Equipment density per fab increases. Complexity structurally boosts market size. Advanced workflows sustain long-term demand. Process proliferation supports growth.

• Strategic Semiconductor Manufacturing Investments
  Governments and enterprises invest in advanced fabs. Capacity expansion targets leading nodes. Equipment procurement is front-loaded. Long-term programs ensure demand stability. Sovereign initiatives support spending. Policy incentives accelerate deployment. Infrastructure investment reduces risk. Strategic importance sustains funding. Regional expansion broadens demand. Investment cycles reinforce growth.

Challenges in the Market

• Extremely Narrow Process Windows At 2nm–5nm
  Process tolerances shrink dramatically. Minor deviations cause yield loss. Equipment stability is critical. Recipe tuning is complex. Defect margins are minimal. Process control costs rise. Yield volatility impacts ROI. Narrow windows slow ramp-up. Tool reliability becomes decisive. Process risk remains high.

• High Capital Intensity And Cost Pressure
  Advanced tools are extremely expensive. Capital budgets are strained. ROI depends on yield success. Tool pricing pressure increases. Customers negotiate aggressively. Cost recovery timelines extend. Smaller fabs are excluded. Capital barriers limit market entry. Investment risk is concentrated. Cost remains a major challenge.

• Materials Availability And Integration Risks
  Novel materials face supply constraints. Quality consistency varies. Integration failures affect yield. Qualification cycles are long. Supplier dependency increases. Materials innovation outpaces readiness. Process disruptions occur. Supply risk affects planning. Integration risk slows adoption. Materials complexity constrains scaling.

• Extended Qualification And Time-To-Market Delays
  Tool qualification takes multiple quarters. Revenue recognition is delayed. Iterative tuning increases cost. Customer acceptance is cautious. Delays affect capacity ramps. Engineering resources are tied up. Competitive timing is critical. Long cycles reduce agility. Time-to-market pressure intensifies. Qualification slows scaling.

• Workforce Skill Gaps And Process Expertise Shortages
  Advanced processes require specialized expertise. Talent availability is limited. Training cycles are long. Ramp-up speed is affected. Knowledge concentration increases risk. Automation helps but is insufficient. Skill shortages raise costs. Operational risk increases. Expertise gaps constrain productivity. Workforce challenges persist.

Advanced Deposition & Etch Equipment Market Segmentation

By Equipment Type

• Atomic Layer Deposition (ALD)

• Chemical Vapor Deposition (CVD)

• Physical Vapor Deposition (PVD)

• Advanced Plasma Etch

By Application

• Advanced Logic (2nm–5nm)

• Advanced DRAM

• Advanced NAND

By End User

• Foundries

• Integrated Device Manufacturers

By Region

• North America

• Europe

• Asia-Pacific

Leading Key Players

• Applied Materials, Inc.

• Lam Research Corporation

• Tokyo Electron Limited

• ASM International

• KLA Corporation

• Hitachi High-Tech Corporation

• SCREEN Holdings Co., Ltd.

• Canon Inc.

• Oxford Instruments plc

• Veeco Instruments Inc.

Recent Developments

• Applied Materials expanded advanced ALD platforms for GAA transistor manufacturing.

• Lam Research enhanced selective etch systems for sub-5nm logic nodes.

• Tokyo Electron advanced high-aspect-ratio memory etch solutions.

• ASM International introduced next-generation ALD chemistries for advanced nodes.

• KLA strengthened process control integration for advanced etch workflows.

This Market Report Will Answer the Following Questions

• What is the projected size of the advanced deposition and etch equipment market through 2031?

• Why are deposition and etch tools critical at 2nm–5nm nodes?

• Which process applications drive the highest equipment demand?

• How do yield challenges affect tool adoption?

• Which players dominate advanced-node equipment supply?

• How does memory scaling influence etch demand?

• What risks constrain rapid deployment?

• How does EUV integration impact etch requirements?

• Which regions lead advanced-node investment?

• What future innovations will shape deposition and etch equipment markets?