The Fan-out WLP supply chain is on the move

 On December 9th, Yavne, Israel-headquartered Orbotech announced that its UK subsidiary SPTS had received $57 million from a leading semiconductor manufacturer for systems to support Fan-Out Wafer Level Packaging (Fan-Out WLP) production.

This announcement confirms the strong enthusiasm for Fan-Out WLP and justifies our high expectations for this advanced packaging platform,” comments Jérôme Azémar, Senior Technology and Market Analyst at Yole Développement and author of the recent report Fan-Out and Embedded Die: Technologies & Market Trends. “2016 will see much broader Fan-Out WLP use and thus more investments in equipment to address that demand. This will include outsourced semiconductor assembly and test (OSAT) companies, integrated device manufacturers (IDMs) and foundries. The full supply chain is now getting ready to ramp production up to larger volumes.”

Fan-Out technology embeds dies in a molded compound, allowing redistribution line pitch to be independent of die size. This approach brings significant added value in shrinking form factors and increasing performance, advantages that are driving high volume adoption of this platform.

Demanding markets such as smartphones, wearables and several applications in the Internet of Things (IoT) need very small packages with high electrical performance and low cost,” Azémar explains. “Several organizations have understood the Fan-Out platform’s great potential. Initially adopted for mobile communications, Fan-Out continues to spread across other applications.”

And the platform hasn’t yet reached its maximum capability or resolved all of its issues. “This is the exciting aspect of the momentum we are seeing,” underlines Azémar. “Numerous players are involved and different Fan-Out solutions are available with names like eWLB, RCP, InFO, and SWIFT. They each involve different techniques and integration schemes, for instance they can be chip-last or chip-first, and they bring their own advantages and challenges. The remaining challenges include warpage, die shift and raising yields, all of which are especially difficult for higher-end, complex applications. It will be very interesting to see how this market evolves and which players will grow fastest.”

The market for Fan-Out packages was worth more than $200M in 2015. Development of proprietary technologies across several organizations shows the value such technology can bring. The entrance of Hsinchu, Taiwan’s TSMC with its own technology, InFO, illustrates the value to organizations other than traditional advanced packaging service players. Spanning the whole range from low-end to high-end packaging requirements, TSMC is developing Fan-Out solutions and expected to enter production in 2016. If it adopts Fan-Out in more complex packages, such as application processors, and wins back Apple it would be a significant disruption of this market. The disruption would be both in terms of technology – traditionally package-on-package (PoP) approaches are used in these applications – and in volumes and revenues.

Yole Développement expects Fan-Out WLP to be the fastest growing advanced packaging technology in the semiconductor industry. Yole’s updated forecast shows a 55% increase in revenue in 2016 due to the impact of TSMC’s entrance, and further growth in coming years, pushing market revenues over $2 billion by 2020.  

FOWLP activity revenues FanOut 3D yole


Related report: Fan-Out and Embedded Die: Technologies & Market Trends

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Jérôme Azémar is a member of the Advanced Packaging & Manufacturing team of Yole Développement, the “More than Moore” market research and strategy consulting company. Upon graduating from INSA Toulouse with a master’s in Microelectronics and Applied Physics, he joined ASML and worked in Veldhoven for three years as an Application Support Engineer, specializing in immersion scanners. During this time he acquired Photolithography skills which he then honed over a two-year stint as a Process Engineer at STMicroelectronics. While with STMicroelectronics, he developed new processes, co-authored an international publication and worked on metrology structures embedded on reticules before joining Yole Développement in 2013.