As the demand for the global semiconductor industry continues to grow, the semiconductor packaging materials market is gradually recovering and entering a new stage of growth. According to the Global Semiconductor Packaging Materials Outlook (GSPMO) report released by TECHCET, the global semiconductor packaging materials market is expected to grow in 2024 and achieve a compound annual growth rate (CAGR) of 5.6% between 2024 and 2028. This growth was primarily driven by strong overall semiconductor demand and artificial intelligence (AI) applications, especially the rising demand for advanced packaging technologies for AI.
Challenges in 2023 and recovery in 2024
In 2023, the global semiconductor packaging materials market experienced a decline of 15.5%, mainly affected by sluggish market demand, global economic slowdown, and some short-term uncertainties. However, with the gradual recovery of the industry, especially driven by areas such as AI, 5G, high-performance computing, and automotive electronics, the outlook for the packaging materials market has improved significantly.
Lita Shon-Roy, President and CEO of TECHCET, noted, "Despite a challenging period in 2023, our latest report predicts a return to growth in the packaging materials market in 2024. We expect the global packaging materials market to exceed $26 billion by 2025 and continue to achieve steady growth through 2028. ”
AI-driven requirements for advanced packaging applications
Among the factors driving the growth of the market, the rise of AI technology is undoubtedly one of the most critical drivers. AI has put forward higher requirements for semiconductor packaging technology, especially in chip packaging in high-performance computing and data centers, and the demand for advanced packaging materials has risen significantly. The improvement of AI algorithms and machine learning processing power has made chips require more sophisticated and efficient packaging solutions to ensure higher computing density and lower power consumption.
At the same time, as semiconductor devices become more and more multi-functional and miniaturized, advanced packaging technologies (such as 3D packaging and system-in-package) are becoming more and more important, which can provide better heat dissipation and electrical performance to meet the special needs of AI applications for chips.
Figure: Global packaging materials market 2023-2028 (Source: TECHCET)
Segments of the encapsulation materials market
The Global Semiconductor Packaging Materials Outlook provides an in-depth analysis of trends in several key packaging materials markets, including:
1. Substrate Material: As a core component in a package, the substrate is critical for thermal management and electrical performance. As chip sizes shrink and performance increases, so do the requirements for substrate materials.
2. Lead frame and connection wire: As an important component of the chip and external circuit connection, the quality of the lead frame and connection wire directly affects the reliability of the package and the efficiency of signal transmission.
3. Encapsulation material and underfill material: Encapsulation material and underfill material are used to protect the chip and ensure its durability and long-term stability. With the complexity of the packaging process, the technical development of these materials has also attracted much attention.
4. Die attachment materials and wafer-level packaging media: Die attachment materials are key materials to ensure a strong connection between the chip and the substrate, and wafer-level packaging technology provides semiconductor manufacturers with more design flexibility, especially in high-density packaging and integration.
5. Wafer-level plating chemicals: Wafer-level plating chemicals play an important role in modern packaging processes, mainly to improve the electrical performance and reliability of chip connections.
Future outlook
As the global demand for semiconductors continues to grow, especially in emerging applications such as automotive, 5G communications, the Internet of Things (IoT), and AI, the demand for packaging materials will continue to grow. This not only brings new business opportunities for material suppliers, but also promotes technological innovation and the development of new materials.
The packaging materials market is expected to exceed $26 billion by 2025 and maintain steady growth through 2028. In the process, breakthroughs in advanced packaging technologies will drive the rapid development of a new generation of semiconductor devices, especially in the demand for high-density integration and multifunctional systems.
The global semiconductor packaging materials market is at an important inflection point. Despite the challenges of the market in 2023, the packaging materials market began to recover in 2024 and is expected to continue to grow, driven by AI and other high-tech applications. For semiconductor manufacturers and material suppliers, this trend means new opportunities and higher technical requirements. In the next few years, the innovation and development of packaging materials will become an important driving force for the continuous progress of the semiconductor industry.
