With the rapid development of science and technology, especially the increasingly wide application of artificial intelligence, 5G communications, Internet of Things and other emerging technologies, the performance requirements for semiconductor chips are also getting higher and higher. In this context, advanced packaging technology has become the new focus of competition in the global semiconductor industry. Advanced packaging not only improves chip performance, but also effectively reduces costs, and is one of the key technologies to promote the development of the semiconductor industry.
According to JW Insights, the global packaging and testing market will reach $81.5 billion in 2022, and is expected to reach $96.1 billion by 2026. The growth in demand for advanced packaging technologies is particularly significant, with the global advanced packaging market expected to increase from $35 billion in 2021 to $48.2 billion in 2026. This growth is mainly driven by megatrends such as 5G, automotive electronics, artificial intelligence, data centers, and wearable applications.
Advanced packaging technologies such as Flip Chip Platforms (FCBGA, FCCSP, and FC-SiP), 2.5D/3D packages, Fan-Out packages, and System-in-Package (SiP) are emerging as key forces driving the industry. These technologies fulfill the market demand for smaller, more efficient, and higher-performance chips by improving chip integration and functionality. Especially in the post-Moore's Law era, when transistor sizes have approached their physical limits, advances in packaging technology have become an important way to improve chip performance.
In the face of the strong demand for advanced packaging technology, global semiconductor giants have announced plans to expand production to cope with the lack of capacity. TSMC plans to invest about 20.6 billion yuan to set up a new wafer fab in Taiwan, focusing on the production of advanced packaging technology. Intel, on the other hand, is building a new packaging plant in Penang, Malaysia, to strengthen its 2.5D/3D packaging technology. In addition, SK Hynix also plans to invest more than $ 1 billion in South Korea to increase investment in the field of advanced packaging.
Despite the growing demand for advanced packaging technology in the global market, there is still a gap between the domestic technical level in this field and the international leading level. The independent control of key equipment for advanced packaging has become an important factor restricting the development of domestic advanced packaging. However, with the continuous progress of domestic enterprises in packaging equipment and materials, the pace of localization substitution is accelerating. The total capital expenditures of domestic packaging and testing factories have improved significantly in recent years, and it is expected that the output value of advanced packaging in China will reach 133 billion yuan in 2023, accounting for about 39% of the total packaging market.
In the post-Moore era, the first condition to realize the scale of advanced packaging and heterogeneous integration is an industry ecosystem covering wafer fabrication, packaging and testing, materials, and co-design simulation. This means that, in addition to the innovation of the technology itself, the synergy and cooperation of the entire industrial chain is also required. Domestic equipment and materials play a vital role in this process, and domestic semiconductor companies are struggling for survival, innovation and development, cooperation and open a new situation.
Advanced packaging technology, as the frontier of the semiconductor industry, its development is not only related to the competitiveness of individual enterprises, but also to the status of the whole country in the global semiconductor industry. With the active expansion of global giants and the continuous catching up of domestic enterprises, advanced packaging technology will usher in a broader development prospect. For China's semiconductor industry, this is an era of both opportunities and challenges, which requires the joint efforts of the government, enterprises and research institutes to realize technological breakthroughs and industrial upgrading.
