Semiconductor Packaging Materials Market - Forecast(2024 - 2030)

semiconductor packaging materials market size is forecast to reach USD 39,600 million by 2029, after growing at a CAGR of 9.79% during 2024-2029. By supplying the materials required for the assembly and packaging of semiconductor devices, the semiconductor packaging materials market is vital to the semiconductor industry. Substrates, leadframes, encapsulants, bonding wires, and die attach materials are a few examples of these materials. Technological developments, consumer demand for more compact and energy-efficient electronics, and the emergence of new technologies like IoT, artificial intelligence, and automotive electronics all have an impact on the market. With the development of cutting-edge packaging technologies like Chip-on-Wafer-on-Substrate (CoWoS) and Integrated Fan-Out (InFO), TSMC has been in the forefront of enabling the integration of numerous chips into a single package. Samsung has made investments in the creation of System-in-Package (SiP) solutions, which provide high-performance, small-form factor packaging choices for a range of uses, such as automotive electronics and mobile devices. 

United States: To improve national security and advance domestic semiconductor manufacturing capabilities, the U.S. government has funded research and development initiatives in semiconductor packaging materials through the Department of Defense (DoD) and the National Science Foundation (NSF). Japan: As part of its plan to support the nation's semiconductor industry and preserve its position as a global leader, the Japanese government has announced investments in semiconductor R&D, including packaging technology.

The report “Semiconductor packaging materials Market– Forecast (2024-2029)”, by IndustryARC, covers an in-depth analysis of the following segments of the semiconductor packaging materials market.

By Type: Substrates, Lead Frames, Bonding Wires, Mold Compounds, Liquid Encapsulants, Die Attach Materials, Solder Balls, Wafer-Level Package Dielectrics, and Plating Chemicals

By Technology: Grid Array, System-In-Package (SIP), Quad Flat Package (QFP), Dual In-line Package, Others

By End-User Industry: Consumer Electronics, Aerospace & Defense, Healthcare, Automotive, Others

By Geography:  North America, South America, Europe, Asia-Pacific, RoW

• Rapid technological breakthroughs are driving constant innovation in the semiconductor packaging materials market to fulfill the changing needs of the electronics sector. Chiplets and 3D stacking are two examples of cutting-edge packaging technology that businesses like Intel Corporation have been investing in. For example, Intel's "Foveros" technology allows numerous logic chips to be stacked vertically, which improves performance and power efficiency in small form factors.

• The market for semiconductor packaging materials is dominated by the Asia-Pacific area, namely by nations like China, Japan, South Korea, and Taiwan, but new regional competitors are gaining ground on them. Packaging materials are only one area in which China's Semiconductor Manufacturing International Corporation (SMIC) has been growing its footprint in the semiconductor industry. SMIC's investments in cutting-edge packaging technologies are intended to strengthen homegrown semiconductor manufacturing capacities and lessen reliance on imports.

• In the market for semiconductor packaging materials, sustainability is receiving more attention as businesses and governments place more emphasis on the creation and uptake of environmentally responsible packaging options. Regulations and incentives are part of the European Union's "Green Deal" plan to encourage environmentally friendly practices in the electronics sector. Businesses such as Infineon Technologies AG are allocating resources towards environmentally sustainable packaging materials and manufacturing techniques in order to meet regulatory obligations and satisfy consumer demand for sustainable products.

Mold Compounds dominated the semiconductor packaging materials market in 2023. Mold compounds are essential for maintaining the dependability and durability of semiconductor devices because they shield sensitive parts from outside impurities and mechanical harm. Mold compounds are essential for a wide range of semiconductor devices since they are employed in a variety of packing technologies, such as conventional leaded packages and cutting-edge packages like chip-scale packages (CSPs), flip-chip packages, and ball grid arrays (BGAs). As sophisticated semiconductor packing technologies have become more complex, materials with increased dependability, less warpage, and higher thermal conductivity have been developed as a result of ongoing innovation in mold compound formulations. 

A new generation of mold compounds with improved temperature management capabilities has been developed, according to a recent announcement from prominent chemical manufacturer BASF SE. These cutting-edge materials meet the increasing need for high-performance semiconductor packages in industries including data centers, automotive electronics, and 5G infrastructure by providing exceptional thermal conductivity and dependability.

System-in-Package (SiP) dominated the semiconductor packaging materials market in 2023. System-in-Package (SiP), one of the aforementioned semiconductor packaging technologies, has dominated the market share in recent years because of its adaptability and capacity to combine several functions into a single package. SiP is well-suited for a variety of applications in consumer electronics, telecommunications, automotive, and Internet of Things devices because it has a number of benefits over conventional packaging technologies. The development of InFO_SoW (System-on-Wafer), TSMC's sophisticated Integrated Fan-Out (InFO) packaging technology, was unveiled. This method enables high-density packing with better performance and a smaller form factor by integrating several chips and passive components on a single wafer. With its substantial cost, performance, and time-to-market benefits, InFO_SoW is a top option for upcoming electronic products.

Automotive Sector dominated the semiconductor packaging materials market in 2023. Because electronics are being integrated into cars more and more, the automobile sector has become a significant user of semiconductor packaging materials. Electric vehicle (EV) powertrains, infotainment systems, advanced driver assistance systems (ADAS), and vehicle connection are just a few of the many uses for semiconductor devices in modern cars. An important recent development that emphasizes the automobile sector's reliance on semiconductor technologies is Nvidia's acquisition of Arm Holdings. Nvidia, which is well-known for its proficiency with artificial intelligence (AI) and graphics processing units (GPUs), hopes to increase its market share in the car industry by utilizing Arm's chip design skills. The significance of semiconductor packaging materials in allowing cutting-edge computing systems for connected and autonomous automobiles is highlighted by this acquisition.

Asia Pacific dominated the semiconductor packaging materials market in 2023. Due to a number of factors, including the existence of important semiconductor manufacturers, the high demand for consumer electronics, and government support for the semiconductor industry, Asia-Pacific has been the dominating region in the market for semiconductor packaging materials. Samsung Electronics made an announcement in South Korea on a large investment in its semiconductor industry, which included the creation of cutting-edge packaging technology. In order to better address the development of innovative packaging solutions for 5G, AI, and automotive applications, Samsung has expanded its System LSI division. This investment strengthens the region's standing as a global leader in the semiconductor industry and highlights its dedication to technological innovation.

The semiconductor industry's constant technological developments fuel the demand for electronic gadgets that are increasingly compact, potent, and energy-efficient. The adoption of cutting-edge packaging materials and solutions is fueled by this need for miniaturization. Manufacturers of semiconductors are under pressure to create novel packaging methods as consumers want electronic devices that are progressively more feature-rich and compact. Wafer-level packaging, 3D integration, and fan-out packaging are some of these methods that allow for increased component density and better performance in smaller form factors.

Fan-out wafer-level packaging (FOWLP) has become more popular as a vital component of advanced packaging in recent years. The partnership between Advanced Semiconductor Engineering, Inc. (ASE) and Deca Technologies to create cutting-edge FOWLP solutions is an illustration of a real-time development. Through this collaboration, Deca's M-Series technology and ASE's experience in packaging technologies will be combined to provide high-performance, reasonably priced semiconductor packaging solutions for upcoming markets including 5G, AI, and Internet of Things devices.

The increasing need for innovative semiconductor packaging materials that provide better electrical performance, thermal management, and durability is driven by the growing need for high-performance computing (HPC) applications, including data centers, artificial intelligence (AI), and automotive electronics. Semiconductor devices with increased processing power, memory bandwidth, and energy efficiency are needed for HPC applications. This calls for the creation of packaging materials with strong component interconnection, effective heat dissipation, and reduced signal loss. The semiconductor industry has seen a major real-time development with NVIDIA's acquisition of ARM Holdings. In order to create integrated solutions for AI, HPC, and automotive computing, NVIDIA—which is well-known for its GPUs used in HPC applications—aims to take advantage of ARM's experience in CPU and system-on-chip (SoC) design. The increasing significance of cutting-edge semiconductor packaging materials is demonstrated by this acquisition.

The growing demand from consumers for more powerful, smaller electronic gadgets is a challenge for semiconductor packaging in terms of complexity and shrinking. Smaller semiconductor packages with the same or better performance require material and manufacturing process advances. Chiplets can now be integrated into a single package thanks to developments in Taiwan Semiconductor Manufacturing Company's (TSMC) InFO technology. This breakthrough solves the problem of shrinking while improving performance by enabling more functionality in smaller form factors.

As semiconductor devices' power densities rise, reliability and thermal control have emerged as crucial packaging problems. Especially in high-performance applications, effective heat dissipation is crucial for preventing device failure and guaranteeing long-term reliability. For advanced packaging applications, Dow Inc. recently unveiled a unique mold compound with enhanced thermal conductivity and dependability. Because of this material's exceptional heat-dissipation qualities, semiconductor devices operate more dependably under hot conditions. When it comes to solving the problems associated with thermal management in semiconductor packing, this invention is a major step forward.

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the semiconductor packaging materials market. Major players in the semiconductor packaging materials market are Dow Inc., Henkel AG & Co. KGaA, Sumitomo Chemical Co., Ltd., BASF SE, Hitachi Chemical Co., Ltd., Alent plc, Kyocera Chemical Corporation, Tanaka Holdings Co., Ltd., ASM Pacific Technology Ltd., and Shin-Etsu Chemical Co., Ltd. among others.

 In September 2023, Dow Inc. announced the launch of its new silicone-based encapsulant material designed for advanced semiconductor packaging applications. This material offers enhanced thermal performance and reliability, addressing the increasing demand for high-performance packaging solutions in the semiconductor industry.

 In December 2023, Henkel AG & Co. KGaA introduced a next-generation die attach adhesive optimized for advanced packaging processes. The adhesive offers superior bond strength and thermal conductivity, enabling the assembly of high-density semiconductor packages with improved reliability and performance.

 In August 2023, Sumitomo Chemical Co., Ltd. announced the development of a new mold compound with enhanced thermal conductivity for semiconductor packaging applications. This compound improves heat dissipation in semiconductor devices, contributing to increased reliability and performance in high-power applications.