Market Trends of 2.5D & 3D Semiconductor Packaging Industry
This section covers the major market trends shaping the 2.5D & 3D Semiconductor Packaging Market according to our research experts:
Growing Consumption of Semiconductor Devices Across Industries to Drive the Market
- Rising digitization, increasing trends of remote work and remote operations, and increasing consumer demand for electronics have sparked the need for advanced semiconductor devices that enable various new capabilities. As the demands for semiconductor devices intensify consistently, advanced packaging techniques provide the form factor and processing power required for today's digitized world.
- For instance, according to the Semiconductor Industry Association, during August 2022, global semiconductor industry sales were USD 47.4 billion, a slight increase of 0.1% over the August 2021 total of USD 47.3 billion.
- 2.5D and 3D packaging technology is quickly gaining popularity in the semiconductor industry owing to its numerous benefits. For instance, 3D integration of semiconductor chips provides a flexible way to carry out the heterogeneous system-on-chip (SoC) design by integrating disparate technologies, such as mixed signal and radio frequency (RF) components, memory and logic circuits, optoelectronic devices, etc., onto different dies of a 3D integrated circuit (IC).
- Consumer electronics is one of semiconductor vendors' most prominent end-user industries. Growth in the smartphone industry, increasing adoption of smart devices and wearables, and rising penetration of consumer IoT devices in applications like intelligent homes are driving the growth of semiconductor devices, thereby positively impacting the market.
- Further, owing to the soaring growth pushed by 5G commercialization around the world, 5G-relevant devices are expected to flood global markets, including network infrastructure, networking equipment, nodes, and mobile terminals. For instance, according to Ericsson, smartphone subscription is expected to reach 7,840 million in 2027, from 6,259 million in 2021.
- Moreover, rising data center build-outs and the increasing use of electric and autonomous vehicles have also increased the demand for advanced semiconductors, further supporting the studied market's growth. For instance, as per IEA, sales of electric vehicles (EVs) doubled in 2021 from the previous year to reach a new record of 6.6 million. Also, nearly 10% of global car sales were electric in 2021. With power semiconductor devices forming a key element in such vehicles, the demand for these devices has witnessed remarkable growth from this segment in recent years.
- Such trends depict the huge demand for semiconductor devices across different end-user industries. With the semiconductor packaging process playing a critical role in semiconductor manufacturing and design, the rising consumption of semiconductor devices will increase the demand for semiconductor packaging solutions simultaneously.
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China Holds Significant Market Share
- Advancing technologies have been contributing to the development of various consumer electronics, medical devices, telecom and communication devices, and automotives, among others. With the launch of 5G services in the country, the demand for smartphones, among other things, has been increasing.
- According to the Ministry of Industry and Information Technology (MIIT), China aims to have 2 million installed 5G base stations in 2022 to expand the country's next-generation mobile network. The Chinese mainland currently has 1.425 million installed 5G base stations that support more than 500 million 5G users nationwide, making it the most extensive network in the world, as per MIIT. The growing implementation of 5G in the region is also expected to promote the demand for 5G-enabled devices, thereby increasing the need for 2.5D and 3D semiconductor packaging in China.
- Similarly, as per the China Academy of Information and Communications (CAICT), China's shipments of smartphones compatible with 5G networks rose by 63.5% to 266 million in 2021. Further, 5G smartphone shipments accounted for 75.9% of domestic shipments, higher than a global average of 40.7%. By July 2022, 5G smartphones would have accounted for 74% of all mobile phone shipments in China. The total number of 5G smartphone shipments by July 2022 was 124 million units, and China introduced 121 new 5G mobile phone models. Such trends will accelerate the demand for 2.5D and 3D semiconductor packaging solutions in the country.
- With the increasing demand for 2.5D and 3D semiconductor packaging solutions, many companies have been carrying out various activities in the market. Major players' investments in the country are set to fuel the 2.5D & 3D semiconductor packaging market.
- In October 2022, TSMC launched its Open Innovation Platform (OIP) 3DFabric Alliance at the 2022 Open Innovation Platform Ecosystem Forum. The new TSMC 3DFabric Alliance would be TSMC's sixth OIP Alliance and the first of its kind in the semiconductor industry for collaborating with various partners to accelerate 3D IC ecosystem readiness and innovation, with a full spectrum of best-in-class services and solutions for semiconductor design, substrate technology, memory modules, testing, packaging, and manufacturing.
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