Semiconductor Advanced Packaging Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, Canada, China, Japan, Germany - Size and Forecast 2024-2028

Semiconductor Advanced Packaging Market Forecast 2024-2028 

The semiconductor advanced packaging market size is estimated to grow by USD 22.79 billion at a CAGR of 8.72% between 2023 and 2028.  The market's expansion relies on several key factors, notably the advancement of semiconductor IC designs, the innovation in 3D chip packaging, and the emergence of FO WLP technology. With the increasing demand for compact electronic devices, there is a pressing need for more intricate and efficient semiconductor solutions. These technologies enable manufacturers to develop smaller yet more powerful electronic products, meeting the evolving needs of consumers. As the industry continues to push the boundaries of semiconductor design and packaging, the market is poised for significant growth and innovation in the coming years.

What will be the size of the Market During the Forecast Period?

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The advanced packaging industry is witnessing a revolution, driven by the fusion of IoT and AI technologies across various applications, from mobiles to industrial sectors. As demand surges for high performance and high-speed solutions, advanced packaging techniques like Flip-chip CSP and Fan-Out WLP are becoming instrumental in accommodating the increasing computing power within compact spaces.

Market Dynamics

 

The market is experiencing remarkable growth, driven by the escalating demand for high-performance and cost-effective solutions across various sectors including healthcare, IT & telecommunication, aerospace and defense, and smart manufacturing practices. This surge is fueled by the exponential rise of artificial intelligence applications, vehicle electrification, and digital transformation initiatives. With semiconductor packaging vendors pioneering advancements such as ultra-high-density fan-out and Si Interposers, the market witnesses the evolution of high-density, programmable logic controller, high-speed, and low-latency solutions. These innovations cater to the demands of HPC applications, networking, and data center servers, ensuring high computing power while minimizing power consumption. As semiconductor sales soar and semiconductor IC quality improves, the industry anticipates a surge in demand for low-profile semiconductor packages and ultra-high-density I/O solutions to accommodate higher bandwidth and performance needs. Amidst endeavors to address security and autonomous driving challenges, the market embraces nanometer chips and advanced packaging materials including plastic, ceramic, metal, and glass casing, enhancing electrical performance while mitigating risks such as radio frequency noise emission, electrostatic discharge, and mechanical damage. These innovations pave the way for low-latency 5G services and secure autonomous driving, establishing semiconductor advanced packaging as a cornerstone of modern technological advancement.

Key Market Driver

Complex semiconductor IC designs is the key factor driving market growth. The number of features and functionalities offered by consumer electronic devices is on the rise as electronic device manufacturers look to differentiate their offerings from those of competitors. Therefore, there has been an increasing need for multifunctional ICs. Semiconductor device manufacturers have addressed this need by developing new and more complex architecture and designs for semiconductor ICs. 

In addition, with the growing complexity of IC design and manufacturing processes, foundries must invest in the latest equipment to develop advanced production systems in line with the latest developments in the packaging field. Besides, with miniaturization becoming vital to semiconductor chip production, chip designs will get even more complex in the future, leading to the need for advanced packaging technologies. Thus, such factors are anticipated to drive the growth of the market during the forecast period.

Significant Market Trends

The integration of semiconductor components in vehicles is a major market trend. The electrification of automobiles as well as the rising demand for automation in vehicles is driving the semiconductor market in this sector. Semiconductor ICs are being used for several purposes in automobiles, such as airbag control, GPS, anti-lock braking systems, displays, infotainment systems, power doors as well as windows, automated driving, and collision detection technology. The need for these semiconductor devices to be of small size and the right form factor will drive the demand for advanced packaging solutions from the automotive sector.

Moreover, the automotive market is expected to grow, driven by the rising yearly car production numbers, generating significant demand for semiconductor devices. Autonomous vehicles incorporate several electronic systems, such as forward collision warning, lane departure warning, smart cameras, and autonomous braking systems. This leads to a high demand for automotive ICs such as MCUs, MPUs, memory devices, power management ICs, and radar and RF modules. This, in turn, will drive the growth of the market during the forecast period. 

Major Market Restraint

Increased production costs are a major challenge to global market growth. One of the factors increasing the production cost is warping. The non-availability of a specific solution to the problem of warping increases the production costs for players in the market, which, in turn, restricts the growth of the market. Warpage is defined as a distortion where the surface of the molded part does not follow the intended shape of the design. This leads to the formation of folds on the wafer surface, thus making it unusable.

Moreover, the issue of warping occurs several times during advanced semiconductor packaging, which could result in the wastage of wafers and result in high costs for the manufacturer. For instance, the issue of warping can occur after the post-module of the reconstituted wafer. It can also occur after the back grinding of the epoxy mold compound to expose the copper contact pad. Thus, such factors are expected to impede the growth of the market during the forecast period.

Market Segmentation

The advancements facilitate miniaturization while ensuring enhanced reliability and thermal management. With machine learning and deep learning algorithms demanding higher processing capabilities, process nodes are shrinking, necessitating innovative packaging solutions to bridges the gap between high performance and energy efficiency. The integration of power devices within advanced packaging further boosts the capabilities of IoT and AI applications, enabling seamless communication, efficient processing, and unprecedented functionality in a compact form factor. As the industry continues to evolve, chips and wires are no longer mere components but the lifelines powering the next generation of technological innovation. The industry is undergoing a paradigm shift to meet the escalating demands for high speed, high bandwidth, and low latency in high-performance computing and server networks. With the proliferation of PCs/laptops and internet-enabled devices, semiconductors are required to deliver higher performance within compact packaging units. The Semiconductor Industry Association spearheads initiatives to address challenges such as dense interconnection and accommodating heterogeneous dies. Innovations like High Density (HD) FO and fan-out wafer level packaging enable higher I/O density and facilitate two-dimensional connections, crucial for the artificial intelligence industry's requirements. As security monitoring becomes paramount, nanometer chips are integrated into advanced packaging platforms with enhanced cooling capabilities to ensure optimal product characteristics and reliability.

By Device

The market share growth by the analog and mixed ICs segment will be significant during the forecast period. The growth in demand for analog ICs from different end-user segments such as communication, consumer electronics, and automotive has been gradual but significant. The increasing pace of new product development and the declining cost per function of ICs have added to the demand for semiconductor ICs (analog ICs). The rapid technological developments in the semiconductor industry have led to the development of efficient analog ICs that deliver optimized performance. This has resulted in the increased proliferation of analog ICs in the global market.

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The analog and mixed ICs segment showed a gradual increase in the market share of USD 10.08 billion in 2018. The primary driving factor behind the demand for 3D ICs, FI WLPs, and FO WLPs in the analog and mixed IC segment during the forecast period is the need for advanced packaging solutions to ensure the robust performance of analog and mixed ICs. Some of the companies operating in the analog and mixed ICs segment are also expanding their product offerings. Such expansions can also increase the demand for advanced semiconductor packaging during the forecast period. 

By Technology 

Flip-chip packaging is a technique where the chip is flipped, making the active side face downwards. The chip is then bonded with the package leads using wires from outside the edges of the chip. The market is expected to grow owing to the strong demand for both mobile and consumer electronic devices. Furthermore, the flip-chip interconnect offers many advantages to end-users. Some of the advantages include reduced signals inductance, high signal density, reduced power and ground inductance, and reduced package footprint. Hence, such factors under the flip-chip segment will boost the growth of the market during the forecast period.

Regional Overview

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APAC is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The presence of several prominent semiconductor foundries, as well as numerous OSATs, is driving the market in APAC. These manufacturers are investing heavily in building new fabs in the region. China is also expected to have two or three 450-mm fabs.  Furthermore, Taiwan is the key market for advanced packaging solutions because of the high demand in the consumer electronics market. South Korea and Japan are other key contributors to the market because of the presence of several semiconductor foundries, such as Samsung and SK HYNIX, in these countries. Some of the vendors operating in the market are expanding their presence by opening new facilities. Hence, such factors are expected to drive market growth in this region during the forecast period.

Customer Landscape

The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Semiconductor Advanced Packaging Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Amkor Technology Inc.: The company offers semiconductor advanced packaging such as thin package formats and BGA packages.
• ASE Technology Holding Co. Ltd.: The company offers semiconductor advanced packaging such as 2.5D and 3D IC Packaging.
• Cactus Materials Inc.: The company offers semiconductor advanced packaging such as Ultra fast silicon detector, IR detector, and VCSEL laser.
  

The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• China Wafer Level CSP Co. Ltd.
• ChipMOS TECHNOLOGIES INC.
• HANA Micron Co. Ltd.
• Intel Corp.
• Jiangsu Changdian Technology Co. Ltd.
• King Yuan Electronics Co. Ltd.
• Microchip Technology Inc.
• nepes Corp.
• Powertech Technology Inc.
• Renesas Electronics Corp.
• Samsung Electronics Co. Ltd.
• SIGNETICS Corp.
• Taiwan Semiconductor Manufacturing Co. Ltd.
• Tongfu Microelectronics Co. Ltd.
• Toshiba Corp.
• UTAC Holdings Ltd.
• Veeco Instruments Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The market is witnessing rapid evolution driven by demands for higher feature and interconnect densities in integrated circuits and memory chips. Advancements in 3D integration and heterogeneous integration techniques enable memory-integrated device manufacturers (IDMs) to enhance performance and feature density. Key players invest in 3D stacking technology and simulation tools, leveraging multiphysics approaches to ensure thermal reliability and signal integrity. Despite challenges posed by the global financial crisis and regulatory frameworks, post-crisis market environments witness increased M&A activities among chipmakers, supporting product support and servicing. The outbreak of COVID-19 led to disruptions, but containment measures and economic recovery efforts drive growth, especially in embedded die technologies and applications like 5G networks, smartphones, and smart video surveillance systems, particularly in Southeast and Northeast Asia, including Nepal and Bhutan.

 

In the dynamic landscape of the advanced packaging industry, innovation reigns supreme to cater to the ever-evolving needs of IoT and AI applications across various sectors like the industrial sector and mobiles. High-performance packaging solutions such as Flip-chip ball grid array and Wafer-level CSP are at the forefront, enabling compact designs while ensuring efficient thermal management and enhanced reliability. These advancements are pivotal for achieving miniaturization without compromising on computing power or energy efficiency. With the rise of AI technologies and machine learning, chips and wires are meticulously integrated into advanced packaging formats like Flip-chip CSP and Fan-Out WLP, facilitating seamless operations and unlocking new possibilities for high speed and high performance processing in IoT devices. As the demand for compact and power-efficient solutions continues to surge, the advanced packaging industry plays a crucial role in driving innovation and propelling the next wave of technological advancements.

Segment Overview

The market forecasting report covers market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028

• Device Outlook
  • Analog and mixed ICs
  • MEMS and sensors
  • Logic and memory devices
  • Wireless connectivity devices
  • CMOS image sensors 

• Technology Outlook
  • Flip chip
  • FI WLP
  • 2.5D/3D
  • FO WLP

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile 
    • Brazil 
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Scope
Market Report Coverage	Details
Page number	180
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 8.72%
Market Growth 2024-2028	USD 22.79 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	8.26
Regional analysis	APAC, North America, Europe, South America, and Middle East and Africa
Performing market contribution	APAC at 33%
Key countries	US, Canada, China, Japan, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Amkor Technology Inc., ASE Technology Holding Co. Ltd., Cactus Materials Inc., China Wafer Level CSP Co. Ltd., ChipMOS TECHNOLOGIES INC., HANA Micron Co. Ltd., Intel Corp., Jiangsu Changdian Technology Co. Ltd., King Yuan Electronics Co. Ltd., Microchip Technology Inc., nepes Corp., Powertech Technology Inc., Renesas Electronics Corp., Samsung Electronics Co. Ltd., SIGNETICS Corp., Taiwan Semiconductor Manufacturing Co. Ltd., Tongfu Microelectronics Co. Ltd., Toshiba Corp., UTAC Holdings Ltd., and Veeco Instruments Inc.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our report has not included the data you are looking for, you can reach out to our analysts and get customized segments.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across APAC, North America, Europe, South America, and the Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies 

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