Status of the advanced packaging industry: where can the industry go?

The advanced packaging industry is becoming a very large business, estimated at $20B in 2014 as big as 38% of the total semiconductor packaging market. In the latest report on the “Status of the advanced packaging industry” Yole Développement estimates that this market will grow at a CAGR of 7%, reaching $30B in 2020 and more than 44% of the total semiconductor packaging market.

The growth is significant (it means that in 2020, more than 40,6 million 300 mm eq. wafers or 32% of total processed wafers will be processed within one of the advanced packaging platform) but what is really shaping the industry is the two main trends: the availability of multiple advanced packaging platforms to support this growth and also the diversity of the industrial players willing to take part in that market.

If you look at the Advanced Packaging platforms available, you can find well established platforms like flip-chip, in productions since 10s years and still growing every year, fast growing platform like Fan-Out WLP (more than 50% growth rate expected in the next 5 years) and emerging platform like embedded die that seems to find a sweet spot in the power electronic fields but still very low in market volume. All the available platforms (flip chip, Fan-In WLP, Fan-Out WLP, embedded die and 3D integration) are now finding their way in a more and more segmented market, where cost but also multiple other old and new technical criteria (thickness, number of I/O, thermal management…) are influencing the choice of the platform for a dedicated device.

In parallel of the availability of these platforms, multiple companies are trying to get involved in that market, either to create a real business or to be a one stop shop for their customers. OSAT, front end foundries, IDM, dedicated bumping houses, PCB and advanced substrates makers are all looking at and investing in the advanced packaging fields. If you look at the share in wafer processing for advanced packaging, the OSAT have clearly most of the capacity (more than 65%), but among the 5 major players you can find Intel and TSMC ! And the share of the IDM and front end foundries is about to increase dramatically in the next 5 years, reaching close to 50% of wafer capacity for advanced packaging.

A good example of these changes in the industry is the emergence of Fan-Out WLP.

Fan-Out technology has been developed by Infineon to enable the packaging of devices with large I/O number with the ability to have no substrates. The first applications have been wireless baseband devices and power management units for mobile phones. After years of stable business around $180M, we are expecting to have a very significant growth starting in 2016, with the involvement of TSMC in support to their move to supply front end wafer manufacturing and back end services to the major players of the mobile phone industry. We have here a double disruption: a front end foundry is involved in advanced packaging in order to support the growth of its front end business and in addition, it kills the substrates business used for the packaging of application processors and similar devices! So the change in the value chain and supply chain are huge and will impact all the industry, from the substrates makers (Ibiden, Shinko, Unimicron…) to the OSAT (ASE, Amkor…) to the other front end manufacturer involved in foundry services (Samsung for example).
And we think at Yole that it is just the beginning: 3DIC using TSV is entering in 2015 the DRAM stacking fields (Samsung and Micro stacked memories) and also the assembly of logic plus memory (AMD new graphic card), in addition to the CMOS image sensor and MEMS fields where such technology is used for years now.

So what will happen? Well, a lot of changes are expected in term of supply chain and value chain. The good news is that the overall market for advanced packaging services is growing at high speed, now it is just about how to benefit from it…

Learn more in the Status of the Advanced Packaging Industry report here

Source: www.yole.fr