Market Trends of Panel Level Packaging Industry
Consumer Electronics Segment to Hold Major Market Share
- Consumer electronics such as smartphones, wearables, and tablets are becoming increasingly thin and compact. To meet the needs of miniaturization and light form factors, PLP allows manufacturers to achieve greater component density and more efficient use of space. For these devices, the reduced footprint caused by PLP is essential as it will enable sleek designs and maximize their utilization of available space.
- The consumer electronics industry competes with manufacturers who strive to differentiate products. By enabling sleek designs, increased functionality, and improved performance for consumer electronics devices, PLP provides an advantage to the market. To maintain their position in the market, manufacturers take advantage of PLP to meet consumer demands and introduce innovative products.
- The increasing penetration of 5G and IoT in recent years presents significant growth opportunities for the market. For instance, as per 5G Americas, the 5G subscriptions worldwide are estimated to reach 2.8 billion in 2024 and 5.9 billion by 2027.
- With the rising investments in 5G, the demand for 5G-enabled smartphones is also increasing parallelly. According to a report from Cybermedia Research, by the end of 2023, after recording a 13 times increase in 5G smartphone sales since its first introduction in 2020, shipments of 5G smartphones increased by 70% yearly. From only 4% in 2020, 5G smartphones were projected to capture a possible 45% market share in 2023.
- Similarly, owing to the rising adoption of the Internet of Things (IoT), the technology that enables communications between things and people using the Internet and IP-enabled protocols, the number of connected devices has been increasing rapidly in recent years. For instance, as per Cisco, there would be 29.3 billion networked devices in 2023. The massive expansion in IoT use cases will provide a significant impetus to market growth.
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China is Expected to Lead the Market
- China is the largest semiconductor consumer, primarily due to the size of the domestic electronics market. The country is the world's largest producer and exporter of consumer electronics, as a significantly more significant number of global vendors have established their facilities to leverage the benefits of cheap labor costs.
- The electronics manufacturing industry has also recently continued to maintain steady expansion. As per a report by the Ministry of Industry and Information Technology via China Daily, in 2023, the industrial added value of major companies in the electronic information manufacturing sector grew by 3.4% yearly. According to the ministry, among significant products, the output of mobile phones increased by 6.9% Y-o-Y to 1.57 billion units, within which the number of smartphones increased by 1.9% Y-o-Y to 1.14 billion units. Several initiatives have been taken in recent years to boost the electronics industry's growth.
- China also leads in 5G adoption globally. According to the Ministry of Industry and Information Technology (MIIT), China aims to have 592.01 million 5G users as of February 2023. This number is anticipated to surpass 1 billion mark by 2025. A combined effort is being made to develop the supporting infrastructure to expand the footprint of 5G across the country.
- For instance, as of October 2023, China had about 3.22 million 5G base stations, constituting 28.1% of its entire mobile base station.
- The growing implementation of 5G in the country has also increased the uptake of 5G-enabled devices. For instance, according to the China Academy of Information and Communications Technology (CAICT), in 2023, 5G smartphone shipments in the country grew by about 11.9% Y-o-Y to 240 million units, while the overall smartphone shipments market grew by about 1.1%, compared to the previous year. As advanced packaging technologies may help resolve many of the 5G chip performance requirements, such trends are anticipated to favor the studied market's growth in the country.
- China is also a leading automotive market in production and consumption, which is anticipated to favor the market's growth in the country. The rising demand for cleaner and safer vehicles is among the major trends in the country's automotive industry, which supports the studied market's growth. Industry megatrends, including autonomous vehicles, electrification, enriched cabins, connectivity and software definition, and zonal architecture, also support the market's growth in the automotive segment.
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