Advanced packaging is the engine driving back‑end equipment growth

Advanced packaging is no longer a sideline in assembly. It is the reason the back-end equipment market returned to robust growth, with Yole Group estimating total back-end equipment revenue at about $6.9 billion in 2025, projected to grow to $9.2 billion by 2030, with a 5.8% CAGR. That step up is anchored in technologies used to build HBM stacks, chiplet modules, and high I/O substrates, and it is reshaping vendor roadmaps, fab buildouts, and the buyer landscape across foundries, IDMs, and OSATs. In short, the systems that can place, align, bond, and protect ever more complex packages are driving the market forward.

In its dedicated semiconductor equipment collection, Yole Group explores the evolution of manufacturing technologies and the cutting-edge tools shaping the industry’s future. Vishal Saroha, Technology & Market Analyst, Semiconductor Equipment at Yole Group, shares exclusive perspectives on technological advancements, shifting market demands, strategic alliances, key acquisitions, and the rapidly transforming semiconductor equipment supply chain.

As part of this collection, Yole Group is excited to unveil the inaugural edition of its Status of the Back-End Equipment Industry 2025 report. This landmark publication delivers an in-depth analysis of a segment in transition, fueled by the rise of advanced packaging, AI acceleration, and heterogeneous integration.

The journey is just beginning. Stay connected with Yole Group for more insights and discoveries across the semiconductor landscape.

The driver is simple. AI and high‑performance computing want bandwidth, locality, and power efficiency at the module level. Packaging must supply these features without negatively impacting the yield or takt time. The industry’s own growth‑driver map connects these needs to equipment such as high‑accuracy bonders, thermocompression clusters, and die‑to‑wafer hybrid bonders. It also highlights supporting materials and processes, such as advanced mold compounds and underfill chemistry. These are not optional upgrades. They are the production choices that enable device makers to ship bigger, denser, and cooler‑running assemblies on schedule.

The supplier bench is deep, with BESI, ASMPT, Kulicke & Soffa, Hanmi, Shibaura, SET, Toray Engineering, and Shinkawa on interconnect, while DISCO and ACCRETECH lead wafer prep, and TOWA strengthens in molding. KLA and Nova concentrate on metrology as overlay targets tighten.

Thermo‑compression bonding is doing the heaviest lifting in the near term. It delivers reliable stacking through micro‑bump interconnects while the industry prepares the next leap in direct copper‑to‑copper joins. Yole Group estimates TCB bonder revenue at about $542 million in 2025, and this is projected to grow to approximately $936 million by 2030, with an 11.6% CAGR. Orders track the HBM3E ramp and move to thicker stacks, with SK Hynix and Micron placing sizeable buys in the first half of 2025. Hanmi is leading, ASMPT is strong in logic applications, and Hanwha Semitech is entering with early systems at SK Hynix. Other participants include Kulicke & Soffa, Shinkawa, Shibuya, and Toray Engineering, with activity at Samsung as well.

TCB is also a lesson in practical constraints. Fluxless flows and finer pitches demand cleaner copper surfaces, better metrology, and more precise thermal control. Tool vendors that integrate oxide‑free handling, real‑time profile feedback, and modular upgrades toward hybrid bonding are best positioned for the next wave. Those that remain on legacy flux flows face a ceiling as stack heights and bridge counts rise.

Device makers already use W2W hybrid bonding in 3D NAND, and D2W hybrids are the focus of leading accelerator packages, with more layers and tighter overlay on the near‑term roadmap. Equipment revenue for hybrid bonders is projected to climb from about $152 million in 2025 to around $397 million in 2030, with a 21.1% CAGR as D2W products such as AMD’s MI300 show what is possible for logic to memory stacking. However, for full HBM stacks, adoption is still constrained by materials and process readiness, so most producers will add hybrid bonding one generation after their TCB-first HBM ramps.

BESI leads, with ASMPT, SET, and Shibaura building share as pilots convert to volume. K&S, Hanwha Semitech, and Capcon are developing platforms targeted for release in 2025, while EV Group, SUSS MicroTec, and TEL are active on the W2W side.

The ecosystem surrounding hybrid bonding is evolving rapidly. Applied Materials deepened its alignment with BESI in April 2025 by taking a nine percent stake to speed a fully integrated die‑to‑wafer line that pairs placement accuracy with wafer‑level cleans and metrology. That step reflects a broader pattern of front-end and back-end expertise coming together to meet sub-micron overlay and low-damage surface prep targets.

High‑end FCBGA demand from AI accelerators and large networking ASICs keeps flip‑chip bonders on an upward slope. Yole Group estimates flip-chip bonders at about $492 million in 2025 and projects $622 million in 2030. Technology is benefiting from the renewed ABF substrate build‑out, while process development pushes toward fluxless flows to cut residues and improve reliability. Flip-chip will remain central to advanced substrates and bridge-based chiplet designs, even as hybrid bonding incorporates increasing numbers of vertical connections.

Wafer thinning, dicing, mounting, and die prep form the runway for advanced bonding. Yole Group estimates thinning at about $582M in 2025 and projects around $845 million in 2030 as TSV reveals and ultra-thin dies become mainstream across memory and logic stacks. DISCO leads in thinning with ACCRETECH following. Accuracy, stress management, and cleaner debond flows are the real constraints here, and they drive buys for higher stability grinders and smarter handling. Encapsulation and molding also benefit because complex stacks and larger packages need better mechanical protection and warpage control.

Two structural shifts explain the trajectory. First, the package has become the system. Bandwidth and energy targets are now solved in the interposer and the stack, which shifts performance bottlenecks into die‑level assembly. Second, capital is following that reality as front-end style process control is moving into packaging lines, and the winners are the vendors that collaborate across these boundaries. That front-end push is linked to die-side investments since surface prep, metrology, and placement performance must align.

By 2030, back-end equipment revenue will approach $9.2 billion, with the bulk of the incremental dollars tied to high‑accuracy placement, cleaner copper interfaces, and higher throughput with ever-tighter overlays.

This shift also spills into testing. HBM programs add insertions after stacking and raise coverage at sort to secure known-good dies. Chiplet modules push greater use of system-level tests to validate interactions across domains. Test suppliers describe rising utilization and capability needs for AI-class devices.

This is why analysts receive many inquiries at Yole Group regarding testing and why we are expanding our test-related activities to address them. Follow Yole Group’s test coverage to learn more.

Vishal Saroha is Technology & Market Analyst, Semiconductor Equipment at Yole Group.

Based in Dresden (Germany), he focuses on developing technology and market products as well as custom consulting projects in the manufacturing and global supply chain domain.

Prior to Yole Group, Vishal worked at GlobalFoundries, Dresden, first as an Integration & Yield Engineer and then as Sr. Engineer – Integration Engineering, where he was the owner of device and SRAM targeting-related activities on their 22FDX technology. Previously, he had experience at imec (Belgium), where he worked on issues related to 3DIC packaging and device reliability.

Vishal holds a master’s in nanotechnology from Katholieke Universiteit Leuven (Belgium) and a bachelor’s in physics from the University of Delhi (India).

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Source: www.yolegroup.com