Global 2.5D & 3D Semiconductor Packaging Market – Growth, Trends, COVID-19 Impact & Forecast (2022)

NEW YORK, November 18, 2022 /PRNewswire/ —

The global 2.5D & 3D Semiconductor Packaging market is expected to register a CAGR of 16.2% during the forecast period (2022-2027). As 5G, AI and high-performance computing continue to permeate the world, there is an increasing demand for semiconductor devices that deliver improved performance, lower latency, increased bandwidth and energy efficiency achieved through 2.5D and 3D packaging technologies. In recent years, 2.5D and 3D have gained momentum as an ideal chipset integration platform due to their merits in achieving extremely high packing density and energy efficiency.

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Semiconductor ICs are deployed in multiple automotive, consumer electronics, and other industries. For example, the emergence of the Internet of Things and Artificial Intelligence (AI) and the proliferation of advanced electronics are driving the high-end application segment in the consumer electronics and automotive industries. Since packaging is an early stage in the electronics value chain, the growth of the market under study is directly influenced by the growth of the semiconductor market.
There are several advantages of applying 2.5D & 3D IC packaging, including ultra-high routing density, ultra-high I/O density, homogeneous/heterogeneous memory, power and optics integration, interposer capable of inserting decoupling capacitor or active devices beds feasible, package reliability to meet automotive requirements, etc.
As semiconductor applications expand, the slowdown in CMOS scaling and rising costs have forced the industry to rely on the advancement of IC packaging. 3D stacking technologies have emerged as lucrative solutions that meet the performance demands of applications such as AI, machine learning and data centers. Therefore, the growing need for high performance computing applications is driving the 3D TSV (Through Silicon Via) market over the forecast period.
Furthermore, a pandemic such as COVID-19 is expected to boost the production of advanced medical devices and equipment to deal with such crises in the future. For example, in 2021, GE Healthcare announced that it would increase its manufacturing capacity for medical equipment, including CTs, ultrasound machines, mobile X-ray systems, patient monitors and ventilators to meet the ongoing challenge of treating COVID-19 patients. As the 2.5D & 3D Semiconductor Packaging has numerous applications in the medical industry, the proliferation of medical device manufacturing is expected to drive the market growth.
However, the high initial investment and increasing complexity of semiconductor IC designs are expected to limit the evolution of the market.

Main market trends

The Consumer Electronics segment is expected to grow a Large market share

Consumer electronics is one of the primary end-use industries for semiconductor suppliers. Growth in the smartphone industry, increasing adoption of smart devices and wearables and increasing penetration of consumer IoT devices in applications such as smart homes are major factors driving the growth of the segment under study. For example, according to Ericsson, there were 5924 million smartphone subscriptions worldwide in 2020 and 6259 million in 2021. It is expected to reach 6567 million in 2022 and 7690 million in 2027.
The consumer electronics industry requires higher power dissipation, higher speeds, more pins, smaller footprints and lower profiles. The miniaturization and integration of semiconductors has led to smaller, lighter and more portable devices. Each new iteration of consumer electronics products is more innovative, lighter and more energy efficient than its predecessors. This creates huge customer expectations for the next iteration, which is a major selling point for consumer electronics makers. The 2.5D & 3D Semiconductor Packaging technologies meet the complex and evolving needs of the consumer electronics market.
With trends such as 5G smartphones, biosensors and more AI features, the market is expected to see an increase in smartphone sales in 2022. The deployment of 5G smartphones would also significantly improve the bandwidth, latency and density of connected devices for wireless data communications. Furthermore, markets like smartwatches and smart speakers have gained immense popularity in recent years due to their increasing functionalities and functions using advanced semiconductor components. For example, the demand for Wi-Fi and Bluetooth chips skyrocketed.
In addition, the growing market for game consoles and increasing advancements in these products further expand the scope of the segment under study. Over the 4-5 years, game consoles have become high tech gadgets and companies like Sony, Microsoft and Nintendo are investing more and more in their product development to reach the current 8th generation of consoles.
These products use advanced technologies including Blu-ray, motion detection, VR, 4K and HD quality video, and online features. Therefore, these applications require chips with an advanced substrate and added functionality, motivating the studied market vendors to invest in the segment. Such developments offer lucrative opportunities for the growth of the studied market.

The Asia-Pacific region is expected to witness high market growth

The increasing adoption rates of smartphones have made Asia Pacific one of the world’s largest mobile markets due to rising population, rising disposable income and increasing urbanization. For example, according to the Ministry of Industry and Information Technology (MIIT), in 2020 and 2021 there were approximately 112 and 116 mobile phone subscriptions per hundred inhabitants in China, respectively. Increasing smartphone penetration in the region is a major growth driver for the studied market.
Memory is a critical market in modern data-centric societies, fueled by major megatrends such as mobility, cloud computing, AI and the Internet of Things. The proliferation of Chinese memory, the growth of flip chip DRAM and 3D stacking technologies are opening significant opportunities for packaging players.
In addition, the region is expected to experience rapid growth due to increased demand for miniaturized circuits and established semiconductor manufacturing companies, OEMs and ODMs.
In addition, countries in the region have begun reorganizing supply chains to prioritize their needs, helping them to withstand fierce competition. The region is also making preventive investments to further strengthen the domestic industry ecosystem so that external shocks cannot shake it off.
For example indoors May 2021, South Korea announced a plan to release 450 billion dollars in the next ten years on new capacities for semiconductor manufacturing. Semiconductors are Korea’s largest export, most of which are memory products: DRAM and NAND Flash memory. The new plan aims to increase the capacity of the country’s advanced logic chip foundry.

Competitive landscape

The global 2.5D and 3D semiconductor packaging market is fragmented due to the presence of several key players such as ASE Group, Amkor Technology Inc., Siliconware Precision Industries Co. Ltd. (SPIL), etc. The market players need to continuously innovate advanced and comprehensive products to remain relevant.

June 2021 – Taiwan’s prominent semiconductor foundry TSMC announced its plans to establish an R&D center in Japan’s science city of Tsukuba to develop 3D IC packaging materials in collaboration with its Japanese suppliers. In May 2021Japan’s Ministry of Economy, Trade and Industry (METI) and its subsidiary, the National Institute of Advanced Industrial Science and Technology (AIST), announced that more than 20 Japanese companies would work with TSMC Japan’s 3D IC R&D center.
July 2021 – Singapore’s Agency for Science, Technology, and Research (A*STAR’s) Institute of Microelectronics (IME) announced a partnership with four key industry players to form a System-in-Package (SiP) consortium. IME would collaborate with Asahi-Kasei, GLOBALFOUNDRIES, Qorvo and Toray to develop high-density SiP for heterogeneous chiplets integration to meet the challenge of 5G applications of the semiconductor industry. The consortium will leverage IME’s FOWLP/2.5D/3D packaging expertise.

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