Global Semiconductor Advance Packaging Market Outlook, 2029

Global Semiconductor Advance Packaging Market Outlook, 2029

High technological advancement in the semiconductor industry has caused rapid growth in the global semiconductor advanced packaging market. Advanced packaging describes a variety of techniques more advanced than the traditional wire bonding techniques, enabling manufacturers to place numerous chips together and improve the performance of a device while reorganizing its footprint. The history of semiconductor packaging traces back to 1950 when the first semiconductor devices appeared. It was always the case that the original purpose of packaging was to afford some physical protection and provide proper electrical contacts to transistors and diodes. But, in the course of time as semiconductor technologies advanced, so did packaging become very necessary to enhance performance, reliability, and miniaturization. The advent of ICs in the 1960s proved to be a decisive change; however, it resulted in the creation of dual in-line packages (DIPs) surface-mount technology (SMT) and more in the 1980s. It is during the late 1990s and the early 2000s that flip chip, wafer-level packaging (WLP), and 2.5D/3D packaging technologies have also arrived on the scene and reshaped the landscape again. Sustainability has recently started to play a more prominent role in the semiconductor advanced packaging market, kick-started by an unprecedented level of focus on environmental issues and regulatory agency pressure. This encompasses lead-free solder development, recyclable packaging materials, and energy-friendly manufacturing processes. Many semiconductor companies are also investing in green technologies and the circular economy to reduce the environmental footprint of the products and make the supply chain greener. 3D Packaging Technologies Facilitate vertical stacking of dies, which improves performance with a reduced form factor. Techniques such as TSVs or through-silicon vias enable high-density interconnections between layers.

According to the research report, “Global Semiconductor Advance Packaging Market Outlook 2029” published by Bonafide Research, the market is anticipated to cross USD 50 Billion by 2029, increasing from USD 36.15 Billion in 2023. The market is expected to grow with a 6.61% CAGR from 2024 to 2029. With the stunning demand for miniaturizing electronic devices only accelerating, the semiconductor advanced packaging market is therefore driven by innovations in packaging technology that will make more compact and powerful solutions possible. The quest for consumer electronics, with the unprecedented growth of smartphones and tablets, accounts for much of the expansion of the market. Secondly, continuous technological advancements in semiconductors materials and devices make better packaging possible. Thirdly, investment in companies' research and development allows next-generation packages that are appropriate for the needs of various industries. Advanced multichip packaging provides high performance and more rapid time-to-market while having reduced chip manufacturing cost and power consumption. In addition, considering the degree of integration of chips along with unlocking higher functionality and a reduced form factor, advanced packaging of the chips is perfectly suitable to be used in key applications like mobile devices and, in the coming years, automotive computing and generative artificial intelligence (GenAI). Key associations that back the global advanced packaging market will also be helpful in promoting innovation and collaboration. The SIA advocates for U.S. semiconductor manufacturers, while SEMI addresses the entire electronics manufacturing supply chain, promoting standards and research. GSA enhances interaction among stakeholders in industry, while the IEEE Electron Devices Society promotes knowledge within electron device technology, which encompasses packaging. The International Microelectronics Assembly and Packaging Society also acts as the forum for discussion of advancements in microelectronic packaging. Fan-out Wafer-Level Packaging has gained immense popularity because it can integrate a multiple die into a single package, with excellent thermal and electrical performance. It is advantageous for mobile and IoT applications, and integration of such advanced packaging solutions is picking up fast in the automotive industry with the growth of electric vehicles and autonomous driving technologies. Advanced packaging is critical to the reliability and performance of systems in a hostile automobile environment.

Market Drivers

• Emergence of Edge Computing and AI-powered Devices: With the rise of edge computing and AI-based devices, there is a strong push toward more efficient, high-performance chips that can process large volumes of data closer to the source. Advanced packaging technologies like 3D IC and Fan-Out Panel-Level Packaging (FOPLP) are crucial to support the rapid data processing, low latency, and power efficiency required in these emerging applications. This growing demand for localized, real-time computing is driving the adoption of cutting-edge packaging solutions.
• Sustainability and Energy Efficiency Demands: Global emphasis on reducing energy consumption is influencing semiconductor packaging innovations. Advanced packaging technologies, such as 2.5D and 3D packaging, contribute to greater power efficiency, which is particularly important in large data centers and renewable energy applications. As consumers and industries become more eco-conscious, the need for packaging solutions that reduce power leakage and heat generation while optimizing energy use becomes a key driver.

Market Challenges

• Supply Chain Vulnerabilities in Advanced Materials: The advanced packaging market is highly reliant on rare and specialized materials, such as high-purity silicon, copper interconnects, and advanced adhesives. Disruptions in the supply chain, particularly during global crises like the pandemic, can lead to shortages and price hikes, significantly impacting production timelines and costs for advanced packaging processes.
• Integration of Emerging Technologies like Quantum Computing: As quantum computing develops, it brings entirely new demands for packaging solutions, including extreme cooling and enhanced signal integrity. The traditional semiconductor packaging ecosystem may struggle to keep pace with these quantum-specific requirements, creating both technical and logistical challenges for packaging providers.

Market Trends

• Rise of Fan-Out Panel-Level Packaging (FOPLP):While Fan-Out Wafer-Level Packaging (FOWLP) has been popular, a new trend is the Fan-Out Panel-Level Packaging (FOPLP), which uses larger substrate panels instead of wafers, allowing for higher throughput and cost savings. This method offers enhanced scalability and is driving adoption in high-volume markets such as smartphones, IoT devices, and automotive sensors, where packaging at scale is crucial.
• Evolution of Chiplet Design and Modular Packaging: The trend toward chiplet architecture is revolutionizing the semiconductor packaging landscape. Chiplet-based designs allow multiple small dies (chiplets) to be combined in a single package, enhancing performance and allowing for better customization based on specific applications. This modular approach to packaging is set to drive innovation across sectors like high-performance computing (HPC), gaming, and advanced machine learning applications, enabling manufacturers to mix and match functionalities without needing to redesign entire chips.

The flip chip technology holds an excellent position in the advanced semiconductor packaging market because it provides the means to enhance the electrical performance and reduce the package size, with all characteristics being quite critical in modern compact electronic devices.

Flip-chip packaging has revolutionized the semiconductor industry by mounting the semiconductor die face down on the substrate, which significantly improves electrical and thermal performance. The length of interconnects reduces, enabling faster signal transfer, contributing to low power consumption, but that does help in using this as an especially favorable option for high performance applications like smartphones, tablets, and wearables. The need for ever-smaller and more efficient electronic devices has driven manufacturers to adopt flip chip technology as a substitute for traditional wire bonding techniques. With this form of compactness comes the ability to achieve higher input/output (I/O) density, thereby providing more functionality in a much smaller footprint. This is a pretty important trend as consumer electronics are now moving rapidly toward miniaturization while still not sacrificing performance. This market dynamics tend to favor flip chip technology for it suits well with trends which have an immediate connection with the Internet of Things (IoT) and artificial intelligence (AI), where ever has an urge to push further into devices which are not only compact but can also process complex tasks proficiently. The technique enhances stack density integration, which is nearly impossible to achieve using conventional packaging methods. As a consequence, firms are investing considerable amounts of money into research and development for flip chip processes with the intention of upgrading their productive capacity.

Organic substrates are currently the most popular choice in the semiconductor advanced packaging market, mainly because of their superior performing characteristics such as excellent electrical properties, lightweight design, and environmental sustainability.
Organic substrates have become very significant in the landscape of semiconductor packaging, mainly for their contribution towards meeting mounting demands in miniaturization and efficiency. The need to reduce the size while improving the functionality of the packages in consumer electronics, automotive technologies, and advanced communication systems calls for such reduction in scale. Organic substrates have applications that include facilities with high-density interconnections combined with better thermal management as an excellent medium to support the modern ICs. They are also light in weight, thus contributing to a general diminution of weights of devices-an important aspect for portable electronics and electric vehicles. Plus, they are made from renewable resources, thus contributing to the efforts towards global sustainability as well as regulations toward plastic reduction. This is an environmentally friendly aspect, making most manufacturers to use organic materials instead of their traditional inorganic counterparts that carry higher levels of environmental impact. Today, the semiconductor industry is also facing chip scarcity resulting from ever-increasing demand for ICs in various applications. In addition, the technology of self-driving cars and ADAS finds a preferable reason behind the search for alternative materials to deliver the operational efficacy of an organic material but with an environmental safety value. In this regard, organic substrates appear as a favorite choice since they meet all the above criteria effectively. In addition, technologies of organic substrate improvement further enhance their performance metrics.

The consumer electronics leading the semiconductor advanced packaging market is because of its relentless demand in small-sized, high-performance devices that require innovative solutions for packaging to enhance functionality and efficiency.
Advanced packaging has emerged as a new power in the consumer electronics market because of the widespread demand for smartphones, tablets, and wearables. These demand critical semiconductor packaging techniques to minimize miniaturization without performance loss. FOWLP and TSV are similar technologies and serve the concept of enhanced integration densities and addressing thermal management issues. Modern consumer electronics have become largely dependent on enhancements in smaller form factors to produce superior performance. This has resulted in some stunning side effects-like sleek designs and enhanced capabilities, which consumers have progressively demanded the manufacturer to provide through advanced packaging solutions. The growth in technologies including 5G, Internet of Things (IoT), and artificial intelligence (AI) has accelerated this requirement. Such technologies demand semiconductors with extremely efficient energy consumption capabilities for processing data at unprecedented rates. Advanced packaging is not only beneficial but also required for such technologies. Furthermore, the semiconductor industry has made significant investments in research and development aimed at the growth of consumer electronics; this can be detected especially in regions like Asia-Pacific, which enjoys a leadership presence among the major manufacturers and has a strengthened supply chain. This region has a large existing base of semiconductor manufacturing and continues to invest in packaging technologies, which would allow it to continue leading the market.

AAPC takes the leadership in the Semiconductor Advance Packaging Market mainly due to its vast portfolio of innovative packaging technologies designed for high-performance, low-power, and compact electronic devices.

The Asia-Pacific is home to key semiconductor manufacturing and processing nations. In that group are China, Japan, and Taiwan. In the past years, India has been emerging with incredible growth in connected devices-from smart home products and wearables. According to Cisco, ""India will account for about 2.1 billion Internet-connected devices by 2023, a number that exceeds more than 900 million internet users."". One of the main reasons behind this growth is the increasing availability of low-cost smartphones and affordable Internet plans. In addition, the growth in per capita income of different countries in the Asia-Pacific region, owing to significant economic development, has resulted in increased consumer spending on semiconductor-based devices and products. These include smartphones, personal computers, high-definition (HD) television sets, among several others. The Leadership of AAPC is supported by significant investments made in research and development that keeps it abreast with the current frontiers of technology. Advanced AAPC Solutions Advanced packaging solutions include 2.5D and 3D packaging, fan-out wafer-level packaging (FOWLP), and system-in-package (SiP) technologies - all critical to improved performance and efficiency of semiconductor devices. These technologies will integrate many more components into a single package, thus minimizing size, functionality improvements, and extreme criticality in mobile devices, data centers, and high-performance computing. In addition, the fact that AAPC closely cooperates with leading semiconductors and has the possibility of developing custom solutions according to customers' specific needs enhances the company's positions in the market. The firm's strong commitment to delivering quality and reliable products, in addition to its long industry experience, has made it a source of pride for manufacturers who wish to integrate more advanced packaging technologies into their products. In AAPC, dedication to innovation and to the customer will not only assure a competitive position but will, in fact make the company the forerunner in the future of semiconductor packaging.

• In 2023, Intel announced a new type of semiconductor packaging called Foveros Omni. This is 3D packaging technology that allows the stacking of dies upon each other. It can lead to vast improvements in performance and power efficiency.
• In 2022, the ASE Group announced plans for a new type of semiconductor packaging called CoWoS Plus. CoWoS Plus is a fan-out wafer-level packaging technology where more dies than in the traditional fan-out wafer-level packaging technologies can be accommodated, possibly thereby cutting costs and increasing performance.
• In 2022, Amkor Technology developed a new style of semiconductor packaging dubbed µPackage. The µPackage is a micro-bump packaging technology that can potentially enhance the performance and power efficiency of semiconductor chips.

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.

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