Packaging biz faces challenges in 2019

An article written by Mark Lapedus, SEMICONDUCTOR ENGINEERING – Although IC packaging industry braces for slower growth in 2019, advanced packaging remains a bright spot. 

The IC packaging industry is bracing for slower growth, if not uncertainty, in 2019, even though advanced packaging remains a bright spot in the market. Generally, IC packaging houses saw strong demand in the first part of 2018, but the market cooled in the second half of the year due to a slowdown in memory. Going forward, the slower IC packaging market is expected to extend into the first part of 2019, although business may pick up by the second half. This, of course, depends on OEM demand, chip growth and geopolitical factors.

The trade tensions between the United States and China already have caused some packaging houses to slow their investments in China. But those trade issues are fluid. It’s still unclear what impact the proposed tariffs from China and the U.S. will have on the semiconductor industry.

This isn’t all doom and gloom. Advanced packaging continues to pick up steam, particularly approaches such as 2.5D, 3D, fan-out and system-in-package (SIP). In addition, new packaging technologies like chiplets and panel-level fan-out are emerging.

Overall, advanced packaging is playing a bigger role in the semiconductor market. Today, fewer device makers can afford to scale and migrate to advanced nodes like 10nm/7nm and beyond due to soaring IC design costs. Another way to get many of the benefits of scaling is by moving to heterogeneous integration, which puts multiple chips in an advanced package.

All told, advanced packaging is growing faster than the overall packaging market, but’s it not enough to offset a projected slowdown in the business. In the overall IC packaging market, “we expect a slowdown in 2019,” said Santosh Kumar, principal analyst at Yole Développement. “That’s throughout 2019.”… Full article