YG PRESS NEWS – Advanced packaging industry: navigating challenges and opportunities in 2023 and beyond

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Following a sluggish first half, it is anticipated that advanced packaging revenues will remain stable in 2023, with a projected uptick of 23.8% expected in the third quarter.

  • The revenue from advanced packaging (AP) is anticipated to achieve a compound annual growth rate (CAGR) of 8.7%, increasing from US$43.9 billion in 2022 to reach US$72.4 billion by 2028.
  • In 2022, AP revenues outpaced the semiconductor market’s growth rate, surging by 9.9% compared to the preceding year, while the broader semiconductor market achieved a growth rate of just 2%.
  • The growth of AP is propelled by major trends such as AI, high-performance computing (HPC), the electrification of automotive technology, and the widespread adoption of 5G.

According to Yole Intelligence, part of Yole group, in the Advanced Packaging Market Monitor, while demand remains subdued in several end-markets, inventory digestion is proving to be a lengthier process than initially anticipated, leading to a decline in utilization rates among package manufacturers in the first half of 2023. In Q2 2023, revenues saw an 8.3% increase compared to the previous quarter. However, as we progress into the latter half of the year, signs of recovery are beginning to emerge, with expectations of improved results in Q3 2023, driven by robust sequential growth of approximately 23.8%, signaling an increase in manufacturing activity.

In 2023, the semiconductor industry is poised for a challenging year, with the AP market expected to remain at a flat US$43.9 billion. Revenues in the AP market are projected to exhibit slight growth in the 2.5D/3D, FCBGA, and FO packaging segments, while other platforms are likely to experience revenue decreases, primarily due to weakened demand in the mobile and consumer markets. Looking ahead to 2024, we anticipate a stronger recovery in the AP market, with a growth rate of 12.4%. This growth will be driven by the increasing enthusiasm for AI, particularly with the surge in generative AI applications such as ChatGPT, necessitating adoption in devices like CPUs, GPUs, FPGAs, and HBM… For more information about this analysis, please contact us!

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