Electrical Industry Today

Cutting Fluid for Semiconductor Equipment Manufacturing Market to Reach USD 3,641.0 Billion by 2032 at 10.08% CAGR | Driven by Chip Production Boom & Environmental Compliance

The Cutting Fluid for Semiconductor Equipment Manufacturing Market is projected to grow from USD 1,689.11 billion in 2024 to USD 3,641.0 billion by 2032, at a CAGR of 10.08%. Growth is driven by the increasing global demand for semiconductors, advanced cutting technologies, and a growing emphasis on sustainability and precision machining in semiconductor manufacturing.
Published 20 July 2025

Cutting fluids, essential in the semiconductor equipment manufacturing process, play a critical role in cooling, lubrication, and chip removal during component fabrication. As chip complexity increases and semiconductor nodes shrink, the demand for high-performance fluids that offer chemical stability, low surface tension, and high thermal conductivity has surged.

In 2023, the market stood at USD 1,534.44 billion, growing to USD 1,689.11 billion in 2024, and is forecast to hit USD 3,641.0 billion by 2032. This robust growth reflects the industry's rapid evolution, driven by electric vehicles, AI chips, IoT devices, and government-led chip production incentives globally.

Key Market Drivers


  • Rising Demand for Advanced Semiconductors
  • Next-gen technologies—AI, 5G, autonomous vehicles, and high-performance computing—require smaller, more powerful chips, fueling demand for cutting fluids that support high-precision machining.
  • Increasing Chip Production in Automotive Electronics
  • With EVs and advanced driver-assistance systems (ADAS) gaining traction, the automotive sector has become a major semiconductor consumer, driving the need for high-purity, non-contaminating cutting fluids.
  • Focus on Sustainability and Environmental Regulations
  • Manufacturers are shifting toward eco-friendly fluids with low toxicity and high recyclability, complying with tightening global environmental and occupational health regulations.
  • Technological Advancements and New Product Development
  • Continuous R&D is enabling the development of synthetic and semi-synthetic fluids tailored for high-speed, cleanroom-grade semiconductor manufacturing environments.
  • Government Initiatives for Domestic Chip Production
  • Strategic investments in semiconductor fabs under programs like the U.S. CHIPS Act, India Semiconductor Mission, and EU Chips Act are increasing the demand for reliable, high-performance cutting fluids.

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Key Market Opportunities


  • Expansion of Semiconductor Equipment Manufacturing Industry
  • As the number of wafer fabs and semiconductor tool makers grow worldwide, so does the market for specialized cutting fluids compatible with advanced equipment.
  • Increased Adoption of Advanced Cutting Fluids
  • Adoption of fluids with nanotechnology additives and superior heat transfer capabilities is accelerating, especially in high-precision etching and dicing operations.
  • Sustainability-Driven Product Innovation
  • Green chemistry principles are being applied to reduce VOCs, increase biodegradability, and improve workplace safety in semiconductor production plants.
  • Material-Specific Fluid Formulation
  • Fluids customized for working with silicon carbide (SiC), gallium nitride (GaN), and other next-gen materials present an emerging growth segment.
  • Automated Coolant Management Systems
  • Integration with automated fluid monitoring systems ensures optimal fluid usage, minimizing waste and extending tool life—key efficiency goals in fab operations.


Market Segmentation

By Type:

  • Synthetic Fluids
  • Semi-Synthetic Fluids
  • Soluble Oils
  • Straight Oils

By Application:

  • Wafer Fabrication
  • Dicing and Cutting
  • Grinding and Polishing
  • Etching and Cleaning

By Material:

  • Silicon
  • Silicon Carbide (SiC)
  • Gallium Nitride (GaN)
  • Others

By Performance Requirement:

  • High Thermal Stability
  • Low Foam
  • Non-Toxic
  • Corrosion Resistance
  • High Lubricity

By End-User Industry:

  • Semiconductor Foundries
  • IDM (Integrated Device Manufacturers)
  • OSAT (Outsourced Semiconductor Assembly and Test) Companies
  • Equipment OEMs

By Region:

  • North America – Driven by investments in chip fabs and clean energy tech
  • Europe – Strong push toward semiconductor independence and green manufacturing
  • Asia-Pacific – Dominates global chip production; high demand for cutting fluids in Taiwan, South Korea, China, and Japan
  • South America – Gradual growth in electronics assembly and component machining
  • Middle East & Africa – Nascent market, expected to expand with new technology zones

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Leading Companies in the Market

Major players are actively innovating in cutting fluid formulations, focusing on performance, compliance, and customization:

  • Valvoline Inc.
  • Quaker Chemical Corporation
  • Exxon Mobil Corporation
  • Chevron Corporation
  • Dow Inc.
  • Royal Dutch Shell plc
  • BP plc
  • Sinopec Group
  • PetroChina Company Limited
  • BASF SE
  • DuPont de Nemours, Inc.
  • LyondellBasell Industries
  • Braskem S.A.
  • NOVA Chemicals
  • TotalEnergies SE

These companies are investing in research and global partnerships with semiconductor toolmakers to enhance fluid performance and application-specific solutions.

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The Cutting Fluid for Semiconductor Equipment Manufacturing Market is undergoing rapid transformation in response to rising chip complexity, environmental compliance needs, and the race for semiconductor independence. With robust demand across all regions, especially in Asia-Pacific and North America, the market is poised to more than double by 2032.

As cutting fluid technology evolves to meet cleanroom-grade standards and sustainability goals, industry players who invest in innovation, regulation alignment, and customer-specific customization will lead this highly competitive and essential segment of the semiconductor supply chain.

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