Thanks to high product adoption in a large number of application channels such as healthcare, automotive, consumer electronics, aerospace, and defense, the advanced packaging market will accumulate significant gains in the next few years. From the current market value to more than 25 billion U.S. dollars, by 2026 it will exceed 40 billion U.S. dollars. The period from 2020 to 2026 will be a period of high explosive growth, with a compound annual growth rate of 8%.
Advanced packaging is to improve the performance of the device while reducing the size. Now a variety of technology categories have been introduced, such as SIP, 3D-IC, 2.5D and fan-out level packaging.
Systems and equipment in some fields, such as transportation systems, industry, household appliances, medical care, and information, are composed of semiconductor chips. In fact, the process of semiconductor packaging is one of the most emerging areas. The semiconductor packaging material is an Electronic solution used to form the connection between the integrated circuit chip and the packaging substrate.
The advanced development market is divided into different types, applications and regions.
In terms of types, the advanced packaging market is divided into 2.5D/3D, fan-out, embedded mold, fan-in WLP, and flip chip. Among them, the growth of fan-in WLP is the most impressive. In 2019, the market share in this field exceeded 10%. This growth is attributed to the increasing adoption of fan-in WLP by smartphone manufacturers to achieve high-density and low-form factor chipsets.
TOP25 still holds the lifeblood of the industry
According to previous statistics, the overall sales of TOP25 in 2018 increased by about 4.8% compared with 2017, to 27 billion U.S. dollars (approximately RMB 183.6 billion), and the overall OSAT market was approximately 30 billion U.S. dollars (approximately RMB 204 billion). ), TOP25 almost occupies the entire OSAT market.
Taiwan, China is far ahead with 52%, followed by China (21%), the United States (15%), followed by Malaysia (4%), South Korea (3%), Singapore (3%) and Japan (2%).
AI and 5G chips will accelerate the packaging market
Nowadays, the continuous expansion of the AI market is driving the growth of the advanced packaging industry. AI chipsets require faster cores, smaller form factors, and high energy efficiency. These needs drive the advanced packaging market. Some top semiconductor companies are also making strategic decisions to introduce innovative advanced packaging design technologies. For example, in August 2020, Synopsys announced a collaboration with TSMC on the advanced packaging side. TSMC will use advanced packaging solutions that include its compilers to provide a proven design flow that can be used in advanced designs such as chip-on-chip packaging (CoWoS) and integrated fan-out packaging (InFO).
The popularity of 5G technology is also increasing the demand for the advanced packaging market. 5G chipsets rely more on advanced packaging technology to achieve high performance, small size and low power consumption. According to the 2020 Mobile Economy Report of the GSM Association, by 2025, the number of 5G connections worldwide will exceed 1.8 billion, most of which will come from Asia and North America. This will greatly promote the demand for advanced packaging of 5G chipsets from IDM and foundries.
The continuous advancement of process nodes and the development of 2.5D/3D packaging have increased production costs. The outbreak of COVID-19 has also put most chip manufacturers under pressure in purchasing raw materials and maintaining test operations. In addition, some policy implementation blockades have caused some fab facilities to close, and fab operators and engineers are also in a state of shortage. Due to the decline in production capacity in consumer electronics, automotive and other industries, the demand for advanced packaging for IDM and foundries has fallen.
From the perspective of market segments, the flip chip type accounted for more than 65% of the market share in 2019, and it is expected to grow at a compound annual growth rate of 5% in 2020-2026. Compact semiconductor components used in high-performance applications such as automobiles, aerospace, and defense will drive market demand. The small size and high input/output density of advanced flip-chip packaging technology has increased the adoption rate of many foundries and IDMs. For example, Infineon announced in January 2020 that because of the high-quality requirements of the automotive market, flip-chip packaging has been set as a new production process technology.
In the application market, consumer electronics accounted for 75% of the advanced packaging market in 2019, and it is expected to increase by 7% by 2026. Mainly due to the market’s pursuit of compact electronic equipment. Advanced packaging technology helps reduce size, increase chip connectivity, improve reliability and provide multi-functional integration. These advantages are evident in smart phones and smart watches.
From a regional perspective, the Asia-Pacific advanced packaging market has a revenue share of more than 70% in 2019.
The increase in the production capacity of semiconductor components and consumer electronic equipment in China, Taiwan, and South Korea is driving the high share of growth in these regions. In addition, major foundries in these regions, such as Global Foundries, TSMC and UMC, are also expanding the opportunities for advanced advanced packaging at the technology and market levels.