Advanced Semiconductor Packaging Market Trends

Market Driver - The Push for Smaller, More Powerful Electronic Devices

In today's technology driven world, the demand for smaller and yet more powerful electronic devices is growing at an immense rate. Consumers constantly want electronic products with slimmer and thinner designs. The semiconductor industry is under tremendous pressure to deliver on these expectations by adopting miniaturization of semiconductors and components down to nanoscale level.

Advanced semiconductor packaging technology integrates greater number of chips and passive devices in the limited real estate available on the electronic boards. This helps manufacturers achieve the desired small form factors for smartphones, tablets, laptops, wearable devices, and other consumer electronics prized by customers globally.

Moreover, sophisticated wafer level and flip chip packaging techniques facilitate the use of fan-out technology, thin, and ultra-thin form factors in the devices. Going forward, the advanced semiconductor packaging market is expected to witness rising sophistication and variety of new generation consumer gadgets. This will continue fueling the need for even higher density of semiconductors in limited space.

Market Driver - Proliferation of Internet of Things (IoT) Devices and the Rollout of 5G Networks

The world is seeing massive growth of internet connectivity worldwide and evolution of high bandwidth 5G networks. The advanced semiconductor packaging market is set for exponential proliferation of internet of things devices in the coming years. The futuristic vision of connected homes, cities, industries, and societies is slowly becoming a reality now, which proves to be an important driver for the advanced semiconductor packaging market.

There is a need for compact system-in-package (SiP) form factors that can seamlessly integrate various sensors, controllers, memory and wireless modules with protection against environmental factors like moisture, dust and vibration. Similarly, applications such as autonomous vehicles and industrial robotics pose thermal challenges due to localized heat generation. This highlights need for advanced semiconductor packaging techniques like flip chip and wafer level packaging.

Furthermore, the high bandwidth requirements of 5G networks can support massive connectivity of IoT nodes generating huge volumes of data. This drives the need for heterogeneous multi-die integration technologies to deliver the needed compute power and memory resources. This will provide a push to growth of the advanced semiconductor packaging market.

Market Challenge - Implementation of Cutting-Edge Packaging Methods can be Cost-prohibitive

While advanced packaging techniques offer numerous benefits such as increased performance, power efficiency, and form factor miniaturization, the implementation of cutting-edge packaging methods can be cost-prohibitive for some manufacturers. Transitioning fabrication lines and production processes to newer packaging technologies requires significant capital investments that not all companies may be able to afford. There are considerable expenses associated with upgrading machinery, tooling, workforce training, and securing relevant packaging material suppliers that are capable of supporting newer methods. Additionally, yields for newer technologies may be lower during initial production ramps, leading to increased costs. This prevents some players, particularly smaller manufacturers and those in price-sensitive markets, from being early adopters of the latest packaging innovations. To justify the costs, substantial business cases need to be proven in terms of addressing large and high-value market opportunities. This challenge of high initial investment costs poses a barrier to technology migration for segments of the advanced semiconductor packaging industry.

Market Opportunity - Increased Use of Electronics in Vehicles Boosts Opportunities for Advanced Semiconductor Packaging

The automotive industry is witnessing higher electronics content in vehicles with the adoption of advanced driver-assistance systems, infotainment features, and connectivity functionalities. Advanced semiconductor packaging plays a crucial role in enabling these in-car electronics and technologies by offering capabilities such as increased functional integration, lowered power consumption, enhanced reliability, and space-saving multi-chip interconnections.

Automakers continue to incorporate more sophisticated electric and autonomous driving features in future vehicles. Hence the demand is expected to rise significantly for advanced semiconductor packages that can operate under stringent automotive quality and reliability standards.

The growing requirements for advanced logic and memory chips in applications like advanced driver-assistance systems, digital instrument clusters, and electric vehicle powertrains provides substantial opportunities for semiconductor packaging firms to engage with automotive OEMs and component suppliers. Semiconductor companies well-positioned to provide packaging solutions for applications in automotive electronics can capture a major share in advanced semiconductor packaging market.