Advanced Packaging Takes Center Stage as Semiconductor Market Gears Up for 6.5% CAGR Growth

The global semiconductor packaging market is forecast to reach US$53.7 billion by 2033, growing at a CAGR of 6.5% from US$28.6 billion in 2023. This growth is driven by the increasing demand for high-performance computing (HPC) and artificial intelligence (AI) applications, which necessitate advanced packaging solutions.

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Demanding Applications Drive Advanced Packaging Adoption

The convergence of HPC and AI is pushing the boundaries of semiconductor technology:

  • High-Density Challenges: These technologies pack ever-increasing numbers of transistors into smaller spaces, leading to higher power densities and thermal management issues. Advanced packaging techniques address these challenges by enabling efficient power delivery and heat dissipation.
  • Thermal Management Imperative: With rising power densities comes the risk of overheating. Advanced packaging solutions, such as 3D packaging and integrated cooling mechanisms, are crucial for maintaining optimal operating temperatures and preventing performance degradation.
  • Speeding Up Communication: Fast and efficient communication between processors, memory, and accelerators is essential for HPC and AI applications. Advanced packaging, such as System-in-Package (SiP) and 2.5D/3D packaging, minimizes signal degradation and latency by shortening interconnect lengths.

Silicon Wafer Packaging Poised for Growth

The demand for silicon wafer packaging is expected to rise significantly, particularly in North America:

  • US Market Strength: The United States boasts a robust semiconductor industry, contributing significantly to the nation’s GDP. High R&D investments fuel innovation in packaging technologies, propelling the US market forward. With a projected CAGR of 6.4%, the US is poised for continued growth.

India’s Growing Defense Sector Drives Packaging Demand

The Indian market presents a promising opportunity for semiconductor packaging:

  • Defense Spending on the Rise: India’s increased military and defense expenditure signifies a growing demand for semiconductors in this sector. This, in turn, will fuel the demand for advanced packaging solutions in the Indian market, with a projected CAGR of 6.3%.

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Looking Ahead: A Future Built on Advanced Packaging

The semiconductor packaging market is on an upward trajectory. The ever-growing demands of HPC and AI applications, coupled with advancements in packaging technology, present a dynamic landscape. Market participants who prioritize innovation and develop advanced packaging solutions that address power, thermal, and communication challenges will be well-positioned to capitalize on this expanding market.

Semiconductor packaging is widely used in the aerospace and defence industry as well. It is used for data processing units and aircraft guidance control assemblies in the aerospace industry.

The defence sector uses semiconductor chips for the missile defence system. Also, advanced fighter planes require a high amount of semiconductor packaging in them. The aviation industry is also utilising semiconductors for applications in boarding, checking, and immigration. This is anticipated to augment the sales of semiconductor packaging over the forecast period.

“Increasing demand for plastic semiconductor packaging, along with expansion in the electronics sector across emerging economies will fuel the growth in the market over the forecast period,” says an FMI analyst.

Key Takeaways:

  • Based on material type, sales in the plastic segment will account for 42% of the total market share in 2022.
  • In terms of end use industry, the consumer electronics segment will offer an incremental opportunity of around US$ 12.1 Bn.
  • The U.S. is expected to account for 16% of the North America semiconductor packaging market share by 2032.
  • The India semiconductor packaging market will offer an incremental opportunity of more than US$ 1.7 Bn.

Competition Landscape

  • Amkor Technology,
  • ASE Group,
  • Intel Corporation,
  • Samsung Electronics Co., Ltd.,
  • Texas Instruments,
  • Fujitsu Limited, and Powertech Technology, Inc.

are the key players operating in the semiconductor packaging market. Some of the other noticeable players in the global semiconductor packaging market include Taiwan Semiconductor Manufacturing Company, FlipChip International LLC, HANA Micron Inc., ISI — Interconnect Systems, Veeco Instruments Inc, Signetics, Broadcom Inc., and STMicroelectronics NV are some of the leading players operating in the global semiconductor packaging market. The key players in tier 1 hold around 20–25% of the global semiconductor packaging market.

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Semiconductor Packaging Market by Category

By Material:

  • Plastic
  • Ceramic
  • Metal

By Technology:

  • Grid-array
  • Small Outline Packaging
  • Flat No-leads Package
  • Dual In-line Packaging

By End Use Industry:

  • Consumer Electronics
  • Automotive
  • Healthcare
  • IT & Telecommunication
  • Aerospace & Defence

About Future Market Insights (FMI)

Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer, Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

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