Europe Semiconductor Advance Packaging Market Outlook, 2029

The European Semiconductor Advance Packaging market is a major segment of the global semiconductor industry, driven by rising demand for miniaturised, high-performance, and power-efficient electronic gadgets. This market focusses on novel packaging solutions that improve semiconductor device performance, reduce size, and minimise costs. Early packaging technologies were primarily concerned with safeguarding semiconductor chips from external influences and guaranteeing stable electrical connections. The industry has expanded to encompass more advanced packaging processes, including as wire bonding, flip-chip, and ball grid array (BGA) technologies.

The introduction of advanced packaging techniques, including as 3D packaging and wafer-level packaging, marked a watershed moment in the industry's evolution. Initially, the pandemic interrupted supply chains and forced temporary shutdown of manufacturing facilities, creating delays in production and deliveries. However, rising demand for electronic devices, particularly in healthcare, remote work, and online education, resulted in a boom in demand for semiconductors.

This, in turn, has pushed the development of innovative packaging technologies to fulfil the growing need for high-performance, energy-efficient electronics. The epidemic also emphasised the significance of resilient and diverse supply chains, driving many businesses to invest in local manufacturing skills and lessen their reliance on single-source suppliers.

According to the research report "European Semiconductor Advance Packaging Market Overview, 2029,", the European semiconductor advance packaging market is anticipated to grow at more than 7% CAGR from 2024 to 2029. Europe imports a large share of its semiconductor components from Asia, specifically Taiwan, South Korea, and China. These imports consist of advanced packaging materials, equipment, and finished semiconductor devices. In contrast, Europe exports innovative packaging technologies and solutions to other regions, including North America, Asia, and the Middle East.

European companies use their knowledge in innovative packaging to meet the global need for high-performance, energy-efficient electrical goods. Dow Chemical, Henkel, and BASF offer sophisticated materials for semiconductor packaging, such as adhesives, encapsulants, and underfills. ASML, Applied Materials, and Tokyo Electron are among the suppliers who provide advanced packaging equipment, including as lithography systems, deposition tools, and etching equipment. Horizon Europe is a European Union-funded program that encourages collaborative research and development projects in advanced packaging technologies. The program aims to increase Europe's semiconductor industry competitiveness and encourage long-term growth.

Many significant players work with universities and research institutions to create cutting-edge packaging technology. These collaborations promote information sharing, talent development, and the commercialisation of creative solutions. NXP offers sophisticated packaging solutions for secure communication and infrastructure, with a strong presence in automotive and industrial markets.

Market Drivers

• Growing Demand for High-Performance Computing: The rise of high-performance computer applications, such as artificial intelligence (AI), machine learning, and data analytics, is increasing the demand for innovative packaging methods. These technologies provide greater integration, increased performance, and lower power consumption, making them critical for modern computing systems.
• Governmental Initiatives and Funding: European governments and organisations, including the European Commission and national research agencies, are making significant investments in semiconductor research and development. Horizon Europe and the European Consortium for innovative Packaging (ECAP) fund and support innovative packaging technologies, promoting innovation and growth.

Market Challenges

• Regulatory and Trade Barriers: Tariffs, export controls, and intellectual property conflicts are all examples of regulatory and trade hurdles that might impede the expansion of the advanced packaging business. These hurdles can disrupt supply chains, raise prices, and restrict market access, reducing European companies' competitiveness.
• Competition from Asia: The European market confronts tough competition from Asian countries, particularly China, Taiwan, and South Korea, who have created significant semiconductor manufacturing capabilities and superior packaging technologies. Intense rivalry can have an impact on European companies' market share, price, and profitability.
• Talent scarcity: /b> The semiconductor industry is experiencing a scarcity of experienced workers, especially in innovative packaging technologies. A shortage of qualified workers can stifle innovation, postpone the development of new technologies, and reduce European companies' competitiveness.

Market Trends

• Heterogeneous Integration: Heterogeneous integration is the combination of various semiconductor technologies and materials into a single package. This method allows for the creation of highly integrated, high-performance, and power-efficient devices, making it an important trend in the advanced packaging market.
• 3D Integration: The technique of stacking numerous chips vertically is gaining traction. 3D integration allows for increased density, improved performance, and lower power consumption, making it perfect for applications such as high-performance computing, data centres, and artificial intelligence.

Flip chip technology is now the top advanced packaging method in the European semiconductor market for a variety of compelling reasons.

One of the fundamental reasons for flip chip dominance is its ability to enable high connection density while maintaining great electrical performance. The chip's direct electrical connection to the substrate minimises inductance and resistance, resulting in faster signal transfer and better overall performance. This is especially important for high-performance computing, data centres, and other applications requiring fast data processing and minimal latency. Additionally, flip chip technology allows for a smaller form factor and higher integration density. Flip chip eliminates the need for wire bonds, allowing for more compact designs that are suited for applications where space is limited, such as mobile devices, wearables, and IoT sensors.

The smaller size also leads to cheaper manufacturing costs and higher yield, increasing its popularity. Flip chips also have greater heat management capabilities. The direct contact between the chip and the substrate improves heat dissipation, which is critical in high-power applications such as automotive electronics and server computers. Effective thermal management enhances the stability and endurance of semiconductor devices, making flip chips a viable option for demanding settings. Leading European semiconductor companies at the forefront of flip chip technology include Infineon Technologies, STMicroelectronics, and NXP Semiconductors. Infineon Technologies, for example, incorporates flip chip technology into its power management and automotive solutions to provide excellent performance and reliability.

In the European semiconductor advanced packaging market, organic substrates lead among diverse materials.

Organic substrates' prominence can be attributed in large part to their low cost. Organic substrates are typically less expensive than ceramic substrates, making them an appealing option for a wide range of applications, including consumer electronics, automotive, and industrial industries. This cost advantage is especially significant in price-sensitive industries where lowering production costs is a priority. Additionally, organic substrates provide great electrical performance. They have low dielectric constants and low loss tangents, which are essential for high-speed and high-frequency applications.

These qualities allow for faster data transfer and lower signal loss, making organic substrates excellent for modern packaging technologies that require great performance. Organic substrates provide offer design versatility and ease of manufacture. They are easily manufactured using normal printed circuit board (PCB) manufacturing procedures, allowing for sophisticated and customised designs. This adaptability is critical for satisfying the unique requirements of various applications and enabling rapid prototyping and production.

Furthermore, organic substrates provide excellent thermal management capabilities. While organic substrates are not as thermally conductive as ceramic packages, they can be equipped with thermal vias and heat spreaders to effectively dissipate heat. This is critical for guaranteeing the stability and lifetime of semiconductor devices, especially in high-powered applications.

In the European semiconductor advanced packaging industry, the automobile sector leads among several end user categories.

One of the key reasons for the automotive sector's dominance is the growing demand for advanced driver assistance systems (ADAS) and autonomous driving technology. These systems demand high-performance, dependable semiconductor components, which modern packaging technologies may supply. Automotive applications require real-time data processing, low latency, and high bandwidth, hence innovative packaging solutions are essential. Furthermore, the growing popularity of electric vehicles (EVs) is increasing the demand for innovative packaging in the automotive industry. Electric vehicles (EVs) require efficient power management, battery monitoring, and charging systems, all of which rely on improved semiconductor packaging technologies.

The demand for small, high-performance, and energy-efficient solutions is driving the expansion of innovative packaging in this segment. The automotive industry has strict safety and reliability standards that innovative packaging solutions can achieve. Vehicles require strong and reliable semiconductor packaging solutions due to their severe working environments, which include temperature extremes, vibrations, and electromagnetic interference.

Infineon Technologies is a key player in the automotive semiconductor market, providing a variety of innovative packaging solutions for power management, sensor systems, and microcontrollers. NXP Semiconductors is a top supplier of automotive semiconductors, with a diverse range of sophisticated packaging technologies for secure connection, radar, and vehicle-to-everything (V2X) communications.

Germany is the European semiconductor advanced packaging industry leader, thanks to a number of important characteristics that have made it a hotbed of invention and growth in this field.

Germany's superiority is due to its robust industrial base, strong R&D capabilities, and significant government assistance. One of the key reasons for Germany's dominance is its long-standing automobile sector. Germany is home to some of the world's largest automobile manufacturers, including Volkswagen, BMW, and Daimler, which are pioneering the use of advanced semiconductor technology for electric cars (EVs) and advanced driver-assistance systems (ADAS). The significant demand for sophisticated packaging solutions in the automobile industry has catapulted Germany to the forefront of the European market. Furthermore, Germany has a large industrial and manufacturing sector, which includes machinery, electronics, and renewable energy.

These industries require high-performance and dependable semiconductor components, which drives the demand for improved packaging technologies. Germany is also a research and development powerhouse, with multiple universities, research organisations, and industry-academia cooperation centred on semiconductor technologies. Fraunhofer Institutes and the Technical University of Munich are among the leading innovators in innovative packaging. These research efforts are aided by significant government funding and initiatives aimed at stimulating technological developments and preserving Germany's competitive advantage in the global semiconductor industry.

• In 2011, Infineon Technologies launched eWLB technology, which allows for high-density integration and increased performance in mobile and consumer electronics. This innovation was a huge step forward in advanced packaging.
• In 2013, STMicroelectronics launched improved SiP solutions, which combine several components into a single package to minimise size and improve performance. This development was critical for IoT and wearable devices.
• In 2017, The European Consortium for Advanced Packaging (ECAP) was founded to promote collaboration and innovation in advanced packaging technology. ECAP intends to increase Europe's position in the global semiconductor market.

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.