Semiconductor Advance Packaging Market Overview, 2024-29

The global semiconductor advanced packaging market has grown tremendously since its inception. Initially, semiconductor packaging used simple methods like dual-inline packages (DIP) and surface-mount packages (SMD). These methods were effective, but they were limited in their capacity to meet the increasing need for miniaturisation and excellent performance in electronics. As technology advanced, the necessity for increasingly sophisticated packaging options became clear. Technologies such as Flip Chip, launched in the 1990s, enabled direct attachment of the chip to the package, improving performance and lowering size.

Fan-Out Wafer-Level Packaging (Fo-WLP), introduced in the 2000s, enhanced the field by allowing for increased density and better thermal management. Material innovations, such as novel organic substrates and enhanced thermal interface materials, have increased semiconductor package performance and reliability. The use of AI and automation in the packaging process has improved quality control, decreased manufacturing costs, and increased efficiency. The COVID-19 pandemic has a significant impact on the global advanced semiconductor packaging business.

Initially, the epidemic disrupted supply chains, shut down factories, and caused production and delivery delays. These issues were worsened by rising demand for gadgets as distant work, online education, and entertainment became more common. The semiconductor industry experienced substantial shortages, affecting a variety of industries, including automobiles, consumer electronics, and telecommunications.

According to the research report "Global Semiconductor Advanced Packaging Market Overview, 2029,", the global semiconductor advanced packaging market is anticipated to grow at more than 6.61% CAGR from 2024 to 2029. The global semiconductor advanced packaging market is anticipated to add to more than USD 14.41 billion by 2024-29.

International trade has a significant impact on the worldwide semiconductor advanced packaging business. Major exporters of semiconductor packaging materials and technologies include Taiwan, South Korea, and the United States. These countries export sophisticated packaging solutions to a variety of destinations, including Europe, North America, and Asia-Pacific.

In contrast, many Middle Eastern and African countries import semiconductor packaging methods and materials to assist their expanding electronics and technology industries. Importing sophisticated packaging solutions is critical for these regions to stay up with technical improvements while also meeting local market expectations. Samsung and GlobalFoundries have collaborated to improve semiconductor packaging technology, with an emphasis on increasing performance and lowering prices. Intel and TSMC have worked together on several projects to develop semiconductor packaging technology, including cooperative research into new materials and techniques.

Various industry consortiums, such as SEMI (Semiconductor Equipment and Materials International) and the Global Semiconductor Alliance (GSA), help companies collaborate to accelerate innovation and standardisation in sophisticated packaging methods. Henkel offers a variety of adhesive and encapsulant compounds utilised in sophisticated packaging applications.

Market Drivers

• Technological Advancements in Semiconductor Packaging: Continuous developments in semiconductor packaging technologies, such as 2.5D/3D packaging and embedded die technologies, are driving market growth. These innovations enhance performance, thermal management, and integration possibilities.
• Advancements in Automotive Electronics: The automotive industry's transition to electric vehicles (EVs) and self-driving technologies is dramatically increasing demand for improved semiconductor packaging. Innovative technologies such as ADAS (sophisticated Driver Assistance Systems) and infotainment systems necessitate sophisticated packaging to meet performance and reliability requirements.

Market Challenges

• Rapid Technological Changes: The rapid speed of technological innovation in semiconductor packaging has the potential to render existing technologies obsolete. Companies must consistently spend in R&D to remain competitive and fulfil the market's changing needs.
• Supply Chain interruptions: The semiconductor industry has faced supply chain interruptions as a result of geopolitical conflicts, trade restrictions, and natural disasters. These disruptions might cause material shortages and manufacturing delays.
• Packaging Complexity: Advanced packaging solutions demand complex production processes and high precision. The complexity raises the possibility of faults and reliability issues, creating difficulties for quality control and process management.

Market Trends

• Shift Towards Eco-Friendly Packaging Materials: The use of sustainable and ecologically friendly materials in semiconductor packaging is becoming increasingly popular. Companies are investing in green technologies and recyclable materials to lessen their environmental impact while also complying with regulations.
• Increasing Focus on Data Centre Requirements: With the growth of data centres and cloud computing, there is a greater emphasis on innovative packaging solutions that can enable high-density interconnects and fast data processing. Packaging improvements are critical to fulfilling the needs of current data centre applications.

Among advanced packaging technologies, 2.5D/3D packaging currently dominates the global semiconductor advanced packaging industry.

2.5D and 3D packaging technologies are leading the semiconductor packaging business due to significant performance and integration advantages. 2.5D packaging includes stacking many chips side by side on an interposer, allowing for high-bandwidth connections and efficient communication between processors. 3D packaging goes a step further by stacking chips vertically, reducing footprint while improving performance and power efficiency of semiconductor devices. Both 2.5D and 3D technologies offer high-bandwidth interconnects while reducing latency, which is critical for high-performance computing applications like data centres and AI processors.

Advanced cooling methods in 3D packaging enable to effectively manage heat dissipation, increasing device reliability and lifetime. TSMC (Taiwan Semiconductor Manufacturing Company) is a major player in the 2.5D/3D packaging business, providing cutting-edge solutions such as CoWoS (Chip-on-Wafer-on-Substrate) technology for 2.5D packaging and InFO (Integrated Fan-Out) technology for 3D packaging. TSMC's significant R&D and manufacturing capabilities position it as a market leader.

Intel pioneered 3D packaging with its Foveros technology, which allows for chip stacking and integration. This technology is employed in Intel's high-performance processors, demonstrating their leadership in 3D packaging innovation. ASE offers a variety of advanced packaging options, including 2.5D and 3D technology. Their competence in packaging and testing services establishes them as an industry leader.

Organic substrate is currently the widely used material in semiconductor advanced packaging, followed by bonding wire, lead frame, ceramic package, and others.

Organic substrate leads the worldwide semiconductor advanced packaging market due to its crucial role in enabling high-density and high-performance semiconductor packages. Organic substrates serve as the foundation for many packaging methods, including Flip Chip and Fan-Out Wafer-Level Packaging (Fo-WLP). They offer a diverse and cost-effective alternative for connecting semiconductor chips to their external interfaces. Organic substrates are often less expensive than ceramic packages, making them a popular alternative for a wide range of applications, including consumer electronics, automotive, and industrial industries.

They offer high-density interconnections and have excellent thermal and electrical performance, making them ideal for current semiconductor devices that require efficient signal transmission and heat dissipation. Organic substrates can be tailored to specific packaging designs and technologies, allowing for flexibility in a wide range of applications, including advanced mobile devices and high-performance computing. Ibiden is a key player in the organic substrate business, noted for producing high-quality substrates for innovative packaging solutions.

The company's experience in producing organic substrates for high-density interconnects contributes to its leadership in this field. Shinko Electric is another market leader in organic substrates, offering sophisticated packaging solutions for consumer electronics and automotive applications. Their innovative materials and manufacturing procedures are well known in the industry.

Consumer electronics is currently the leading end user of semiconductor advanced packaging, followed by automotive, telecommunications, healthcare, and other industries.

Consumer Electronics is the leading end user in the global semiconductor advanced packaging market, owing to the constant desire for smaller, more powerful, and efficient electronic products. This sector includes a diverse range of products, such as smartphones, tablets, wearables, and smart home gadgets, all of which require innovative packaging solutions to meet performance, size, and power efficiency requirements. The consumer electronics business has high-volume production cycles, needing innovative packaging solutions for mass manufacturing and high-density interconnections. This creates a significant demand for innovative packaging methods.

Rapid technological advancements in consumer electronics, such as the development of 5G-enabled devices and next-generation mobile processors, create a demand for cutting-edge packaging technologies such as Fan-Out Wafer-Level Packaging (Fo-WLP) and 2.5D/3D packaging to improve device performance and functionality. The trend for miniaturisation and compact design in consumer electronics necessitates innovative packaging solutions that can deliver great performance in a smaller footprint. Samsung is a top manufacturer of consumer electronics and semiconductor components.

The company's innovation in sophisticated packaging solutions supports its diverse product line, which includes smartphones and wearable devices. Qualcomm's breakthroughs in semiconductor packaging, particularly for mobile CPUs, are key to its success in the consumer electronics industry. The company's concentration on high-performance packaging solutions is the driving force behind its industry leadership.

Asia Pacific leads semiconductor advanced packaging market because of its vast electronics manufacturing industry and government backing for semiconductor development.

One of the key reasons for Asia Pacific's supremacy is its strong industrial skills and established supply chains. Countries such as China, Taiwan, South Korea, and Japan have established robust manufacturing ecosystems that feature cutting-edge packaging technology. These countries are home to some of the world's largest semiconductor foundries and packaging facilities, along with cutting-edge equipment and technology. Furthermore, the Asia-Pacific region benefits from substantial government backing and investment in the semiconductor industry. Governments in the area have developed policies and measures to promote innovation, attract foreign investment, and improve the competitiveness of their semiconductor businesses.

For example, China's "Made in China 2025" effort and South Korea's "K-Semiconductor Strategy" are generating significant investment in innovative packaging technology. Furthermore, the Asia Pacific area is a key user of semiconductor products, owing to the rise of industries such as consumer electronics, automobiles, and telecommunications. The growing need for high-performance and energy-efficient electronic gadgets in various industries is driving the region's advanced packaging industry.

Furthermore, the Asia Pacific region serves as a global hub for electronics production, with a high number of original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) suppliers. The proximity of these manufacturers to semiconductor foundries and packaging facilities allows for more efficient and cost-effective supply chains, which strengthens the region's global market leadership.

• 2013 - Intel introduces 3D Tri-Gate transistors, which revolutionise semiconductor packaging by enhancing performance and power efficiency. This innovation was important to the advancement of high-performance computers and consumer electronics.
• 2015 - ASE Group Acquires STATS ChipPAC: ASE Group purchased STATS ChipPAC to boost its position in the advanced packaging sector. This acquisition enabled ASE to expand its technological portfolio and increase its global footprint.
• In 2018, TSMC introduced InFO (Integrated Fan-Out) technology, a breakthrough in 3D packaging that provides greater thermal performance and more compact design possibilities for semiconductor devices.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Semiconductor Advance Packaging market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Technology

• Flip Chip
• Embedded Die
• Fi-WLP
• Fo-WLP
• 2.5D/3D

By Material Type

• Organic Substrate
• Bonding Wire
• Lead Frame
• Ceramic Package
• Others (e.g., Encapsulates, Die-Attach Materials)

By End-Use Industry

• Consumer Electronics
• Automotive
• Telecommunication
• Healthcare
• Others (e.g., Data Centres, IoT Devices, Aerospace & Defence and Industrial)

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Semiconductor Advance Packaging industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.