The global Advanced Packaging market was valued at around US $30.21BN in 2022 and is expected to reach US $62.87 BN by 2030 with a CAGR of 7.05% during the forecast period.
Advanced packaging typically refers to sophisticated and innovative methods of packaging electronic components, particularly semiconductor devices, to enhance their performance, reliability, and functionality. The field of advanced packaging has evolved to meet the demands of increasingly complex electronic systems, including those used in consumer electronics, telecommunications, automotive, and industrial applications. The choice of packaging technology depends on various factors, including the specific requirements of the application, cost considerations, and the need for miniaturization and improved performance. Advances in packaging technology continue to play a crucial role in the development of more powerful, compact, and reliable electronic devices.
Several distinct types of semiconductor packages have been made since the first semiconductor package, demonstrating the significant evolution of modern packaging methods. Modern packaging technology has developed to reduce costs while improving integrated circuit performance and throughput. Furthermore, the need for sophisticated packaging has grown significantly in recent years because of the rising use of semiconductor integrated circuits (ICs) in automobiles. An increase in the functional density of large system-on-chip solutions is also associated with packaging technology improvement. Consequently, the chip industry has developed a new set of solutions called as advanced packaging in response to the focus on wafer-level packages and heterogeneous integrations.
The market for advanced packaging is also being significantly impacted by the growing size of silicon, which is now 300 mm instead of 100 mm. The cost of production has dropped by 20–25% as a result of the switch to greater diameter wafers, and this money is anticipated to be invested in sophisticated packaging solutions.
Drivers
Increasing Need for Device Miniaturization
Growing requirement for device miniaturisation is driving the demand for advanced packaging. Advanced packaging serves as a protective shell for silicon wafers, logic components, and memory during the final stage of semiconductor manufacture. This prevents physical damage and corrosion. Connectivity to a circuit board is made possible by the chip's upgraded packaging. Additionally, it requires merging several additional methodologies, including system-in package, fan-out wafer level packaging, 2.5D, and 3D-IC.
Furthermore, as technology advances, producers are focusing on producing small electronic devices for a range of industrial verticals, such as consumer electronics, healthcare, automotive, and semiconductor IC manufacturing. In order to achieve perfect patterning on chips and wafers, companies are shrinking the size of their integrated circuits. The medical device market is witnessing an increase in demand for nano-sized robotic surgery equipment as a result of the advancements and sophistication of wearable and personal healthcare devices. The increasing popularity of small electrical gadgets has compelled designers to employ advanced packaging instead of traditional methods. Thin wafers assist minimise package thickness from smart phones, portable gadgets, and other compact electronic equipment.
Challenges
High Cost of Advanced Packaging
The high cost of advanced packaging is a significant challenge faced by the semiconductor industry. While advanced packaging technologies offer benefits such as improved performance, miniaturization, and heterogeneous integration, the complexity of these processes contributes to increased production costs. Advanced packaging often involves complex manufacturing processes, including the use of cutting-edge technologies such as extreme ultraviolet (EUV) lithography, 3D integration, and advanced materials. The implementation and maintenance of these processes can be expensive.
Also, the use of advanced and specialized materials, such as high-performance polymers, organic substrates, and advanced ceramics, contributes to the overall cost of packaging. These materials are chosen for their specific electrical, thermal, and mechanical properties. Moreover, advanced packaging processes may initially have lower yield rates during production, meaning a higher percentage of manufactured components may be rejected due to defects. This can lead to increased costs associated with rework, waste, and lower overall production efficiency.
Trends
Expansion of AI in Advanced Packaging
Artificial Intelligence (AI) is increasingly playing a role in advanced packaging within the semiconductor industry. The integration of AI technologies in various aspects of packaging processes contributes to improved efficiency, quality control, and decision-making. AI algorithms can analyse data from various stages of the packaging process to identify optimization opportunities. This includes improving the efficiency of manufacturing steps, reducing energy consumption, and enhancing overall production yield.
Also, AI-powered predictive maintenance systems can monitor equipment conditions in real-time and predict when maintenance is needed. This helps prevent unexpected downtime, reduces the risk of equipment failure, and extends the lifespan of packaging machinery. Other ways in which AI is being utilized in advanced packaging includes quality control and inspection, defect detection and classification, process monitoring, supply chain optimization, smart manufacturing, design and layout optimization, process control and automation, energy efficiency, data analytics for decision-making, customization and personalization.
Moreover, market players are actively involved in developing advanced packaging technologies with AI integration. For instance, in 2023, Kulicke and Soffa Industries, Inc. received various orders for its Thermocompression Bonding solutions, which primarily supports Silicon Photonics based Co-Packaged Optics applications that are deployed in high-bandwidth networking transceivers. For the fiscal years 2024 and 2025, K&S expects a number of follow-on CPO orders to support capacity development ambitions. Through the year 2033, CPO units are expected to increase at a 66% CAGR, which is a small part of the far greater AI opportunity. Also, in 2023, Samsung Electronics Co., announced to introduce a cutting-edge three-dimensional chip packaging method to challenge Taiwan Semiconductor Manufacturing Company (TSMC). The Samsung Advanced Interconnection Technology, or SAINT, will be used by the Suwon, South Korea-based chipmaker to combine memory and processors needed for high-performance semiconductors, including AI chips, in considerably smaller sizes.
COVID -19 Impact on Advanced Packaging Market
The impact of COVID-19 on the semiconductor industry, including advanced packaging, has been multifaceted. The pandemic has influenced various aspects of the supply chain, production processes, and market dynamics. The semiconductor industry relies on a global and interconnected supply chain. COVID-19-related lockdowns, restrictions, and disruptions in various regions led to shortages of raw materials, components, and equipment necessary for advanced packaging processes. Also, manufacturing facilities worldwide faced operational challenges due to workforce disruptions, social distancing measures, and health and safety concerns. These factors led to production slowdowns and delays in advanced packaging processes.
The pandemic also triggered fluctuations in demand for certain semiconductor products, including those utilizing advanced packaging. While some segments experienced increased demand (e.g., consumer electronics for remote work and entertainment), others faced decreased demand (e.g., automotive). Hence, COVID-19 pandemic had a significant impact on the global Advanced Packaging industry.
Advanced Packaging Market Segmentation
By Packaging Type
Based on packaging type, the global Advanced Packaging market is bifurcated into flip chip, embedded die, fan-in WLP, fan-out WLP, and others. Flip chip packaging type segment is expected to dominate the market in the forecast period. It accounted for the market share of about 32.82% in 2022. This growth is majorly attributed to their large-scale use, particularly in high-end tablets and smartphones that must adhere to stringent space as well as power management specifications. However, fan-out WLP is expected to witness fastest CAGR of about 7.46%. The latest advancement in packaging in the microelectronics industry is fan-out wafer-level packaging, or FOWLP. With the aid of FOWLP, larger substrate formats are sought due to different technological advancements towards heterogeneous integration, such as multiple die packaging, passive component integration in packages and redistribution layers, and other package-on-package techniques. It is therefore ideal for packing a highly compact energy harvesting system made up of a power control unit, a supercapacitor for energy storage, and a piezo-based harvester.
By Application
Based on application, the global Advanced Packaging market is bifurcated into consumer electronics, automotive, industrial, healthcare, aerospace and defence and others. The consumer electronics accounted for the largest share of the market in 2022, accounting for about 38.65% of the share, and is expected to dominate the market during the forecast period. Rise in the demand for consumer electronics products such as air conditioners, laptops, and cell phones, is expected to result in the dominance of the segment. Additionally, the need for electronic equipment miniaturisation presents enormous growth prospects. Moreover, the sales of consumer electronics is expected to increase due to the growing trend of advanced connected homes. Appliances featuring modern technologies like voice help, Bluetooth, and Wi-Fi connectivity are expected to be quite popular among millennials. The demand for the newest technologically advanced things to furnish one's home is growing as income levels rise across the globe. These elements would have a favourable impact on consumer electronics advanced packaging.
By Region
North America, Europe, Asia Pacific, the Middle East & Africa, and South America are the five regions that make up the worldwide Advanced Packaging market. Asia Pacific captures the largest market share of about 62.79% and witness the CAGR of about 8.17% in the forecast period. The Asia Pacific region has a notable market share owing to the substantial number of semiconductor manufacturing operations that take place in the region. Pure-play manufacturers in the area are expanding their production capacity in order to meet the increased demand from vendors who provide fabless products. China is attempting to unify the market for substrate manufacturing as well. As demand for data centres and artificial intelligence (AI) grows, manufacturers in the Asia-Pacific area concentrate on expanding their clientele in North America. For instance, Ibiden is aiming to increase its sales from Semicon players like Intel while decreasing its Flip Chip business, which caters to the domestic smartphone market. By concentrating on silicon bridges, which link memory semiconductors with CPUs and GPUs, Ibiden increased the capacity of its Japanese plant by 50% by the end of 2020.
Moreover, China is one of the world's fastest-growing economies and has a sizable population. According to data from the Chinese Semiconductor Association, demand for IC imports has been rising steadily since 2014. By using a multifaceted approach, the Chinese government has encouraged the growth of the local IC sector in order to take the lead globally by 2030 in all major IC industrial supply chain segments. It is projected that the expansion of the semiconductor IC sector in the area would increase demand for advanced packaging. Also, companies in the region engage in activities for organic growth that capitalise on market expansion. For example, in 2020, Taiwan Semiconductor Manufacturing Co. collaborated with Google and other US tech companies to create a new method of increasing the power of chips. As per the company's statement, TSMC is utilising a novel 3D technique known as SoIC to expand chip packing both vertically and horizontally. It enables the stacking and linking of many chip types—including memory, CPUs, and sensors—into a single package.
Advanced Packaging Competitive Landscape
The competitive landscape of the Advanced Packaging market involves assessing the competitive landscape to understand the strengths, weaknesses, opportunities, and threats of the industry. There are many large to small players in the advanced packaging market. The market for advanced packaging will rise as a result of major players in the industry investing heavily in research and development to broaden the scope of their products. In order to broaden their global reach, market players are also taking part in a variety of strategic activities. Notable advancements in the industry include the launch of new products, agreements, mergers and acquisitions, increased investments, and partnerships with other companies.
The Advanced Packaging market is highly competitive, with numerous companies vying for market share. Prominent companies in the Advanced Packaging Market include:
Major Players:
Recent Developments in the Advanced Packaging Market
Advanced Packaging Market Scope
| Report Components | Details |
|---|---|
| Base Year | 2022 |
| Forecast Period | 2023-2030 |
| Quantitative Units | Revenue in US $ |
| Drivers | Miniaturization of devices, Increasing adoption of MEMS, Increasing Trend of Advanced Architecture in Electronic Products, Favorable Government Policies and Regulations in Developing Countries |
| Challenges | Challenges High cost of advanced packaging, Market Consolidation affecting Overall Profitability |
| Trends | Innovations in packaging technology, Emerging trends of fan-out wafer level packaging, Expansion of AI in Advanced Packaging |
| Segments Covered | By Packaging Type (Flip Chip, Embedded Die, Fan-In WLP, Fan-Out WLP, Others), By Application (Consumer Electronics, Automotive, Industrial, Healthcare, Aerospace And Defence, Others) |
| Countries Covered | North America (United States, Canada, Mexico), Europe (Germany, UK, France, Italy, Spain, Nordic, Rest of Europe), Asia Pacific (China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia Pacific), Middle East & Africa (UAE, Saudi Arabia, South Africa, Rest of Middle East & Africa), South America (Brazil, Argentina, Rest of South America) |
| Market Players Covered | Amkor Technology, Inc., Advanced Semiconductor Engineering Inc., Analog Devices, ASE Group, Brewer Science, Inc., Chipbond Technology Corporation, Chipmos Technologies Inc., Intel Corporation, International Business Machine Corporation, Microchip Technology Inc., Powertech Technology Inc., Qualcomm Corporation, Renesas Electronics, Samsung Electronics Co. Ltd, Sanmina Corporation, Siliconware Precision Industries Co., Ltd., Stats Chippac Pte. Ltd, Süss Microtec SE, Taiwan Semiconductor Manufacturing Company, Texas Instruments, Toshiba Corporation, Universal Instruments Corporation and others. |
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