Market Trends of High-end Semiconductor Packaging Industry
Consumer Electronics Sector is Expected to Boost the Market
- The consumer electronics sector is significantly investing in the semiconductor packaging market. Growth of the smartphone, rising wearable and smart device adoption, and increasing consumer IoT device penetration in applications like smart homes are a few of the influential factors influencing the segment's growth. According to Ericsson, smartphone mobile network subscriptions worldwide reached nearly 6.6 billion in 2022 and are predicted to exceed 7.8 billion by 2028.
- Additionally, markets for smartwatches and smart speakers have become extremely popular in recent years due to the growing number of features and functionalities they can offer due to sophisticated semiconductor components. As a result, demand for Wi-Fi and Bluetooth chips increased dramatically. Consumer electronics manufacturers also use semiconductor components to equip their products with IoT and AI models, enhancing user experience and making products brighter.
- For instance, in March 2023, Huawei planned to launch its foldable smartphone with a significant battery upgrade in the coming years. The device will feature an upgrade to its battery, and it is rumored to be named the Mate X3. Further, Huawei will likely use the high-silicon anode material to enhance the smartphone's battery capacity, which is expected to be 5060mAh.
- Personal computers and laptops are now essential for young consumers heavily invested in technology. In addition, over the next ten years, innovation and advancement in the electronics sector are anticipated to drive semiconductor packaging sales. Sales of semiconductor packaging are expected to increase globally in both developing and developed markets due to the introduction of IoT and AI.
- Intel Corporation and the University College London (UCL) collaborated in June 2022 to introduce a new touchless computer that can be operated and controlled by gesturing the hands, head, face, and entire body. Higher power dissipation, faster speeds, higher pin counts, smaller footprints, and lower profiles are all constant demands in the electronics market. Semiconductor miniaturization and integration have resulted in lighter, smaller, and more portable appliances such as smartphones, tablets, and emerging IoT devices.
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North America to Experience Significant Market Growth
- The semiconductor sector in the United States and Canada has maintained a significant position in key future technologies, such as AI, quantum computing, and sophisticated wireless networks like 5G. For instance, as per GSMA, 5G will become the lead network technology in the US by 2025. The increasing implementation of 5G networks coincides with the growing demand for more immediate high-performance computing appliances, for which semiconductors form a critical element.
- The United States Government has significantly invested in boosting the penetration of advanced technologies, bolstering the demand for high-end semiconductor packaging. The United States is one of the world's fastest-expanding economies. According to WSTS, in October 2022, semiconductor sales in the Americas amounted to USD 12.29 billion, an increase from the USD 12.03 billion recorded for the previous month.
- The US Senate recently announced the Facilitating American-Built Semiconductors (FABS) Act, which may provide tax incentives to semiconductor manufacturers. The bill may establish a 25% investment tax credit for semiconductor manufacturing investments in equipment or fabs.
- Additionally, in September 2022, the Biden administration announced that it would invest USD 50 billion in building up the domestic semiconductor industry to counter dependency on China, as the US produces zero and consumes 25% of the world's leading-edge chips vital for its national security. President Joe Biden signed a USD 280 billion CHIPS bill in August 2022 to boost domestic high-tech manufacturing, part of his administration's push to increase US competitiveness over China. Such robust investments in the semiconductor sector in the region would offer lucrative opportunities for the growth of the studied Market.
- Furthermore, the United States is one of the largest markets for electric vehicles, and the country has also recorded rapid growth in EV sales in recent years. According to KBB, in the Q2 of 2022, just under 196,800 battery electric cars were sold in the United States. This was a year-over-year boost of around 66.4% compared to the sales recorded in Q2 of the previous year.
- Many regulations have been implemented in recent years to promote the use of electric vehicles in the country. For instance, New York state lawmakers recently passed a bill that essentially mandates that all new passenger cars sold in the state run on electric power by 2035. Moreover, the United States has set a target to ensure half of the vehicles sold in the country are electric by 2030.
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