ADVANCED PACKAGING INDUSTRY UPDATE - SYNAPS

Advanced packaging: OSATs, foundries, and IDMs all want to be part of the game

Extracted from: 
•  Status of the Advanced Packaging Industry report, Yole Développement
•  Advanced Packaging Quarterly Market Monitor, Q1, 2020, Yole Développement

OUTLINES:

  • Advanced packaging was a US$29 billion market in 2019. It is expected to grow at 6.6% CAGR between 2019 and 2025.
  • Due to strong momentum driven by slowing Moore’s Law and heterogeneous integration, along with the megatrends 5G, AI , HPC , IoTs , etc., the share of the advanced packaging market segment within the total semiconductor market is continuously increasing.
    It will reach almost 50% of the total market by 2025.
  • Technology status:
    Advanced packaging is moving from package substrates to silicon platforms. This trend is offering huge opportunities for TSMC, Intel, and Samsung.
  • Competitive landscape:
    Advanced packaging activities at TSMC has become a fully-fledged business in itself.
    With an expected US$2,8 billion revenue from advanced packaging activities in 2019, TSMC will achieve the #4 position in the 2019 OSATs ranking.
  • COVID-19 impact:
    Semiconductor business will decline in 2020 due to COVID-19 pandemic. According to Yole Développement, it is expected to recover in 2021.
    The advanced packaging market will decrease by 7% in 2020, while the traditional packaging market will decrease by 15%.
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“Once the traditional, exclusive domain of OSATs and IDMs , today a paradigm shift is occurring in the assembly / packaging segment of the semiconductor manufacturing supply chain”, asserts Santosh Kumar, Principal Analyst and Director Packaging, Assembly & Substrates, Yole Korea, part of Yole Développement (Yole). “Players from different business models, including foundries, substrate/PCB suppliers, EMS /ODMs , are entering this market and cannibalizing OSATs’ share.”
Without doubt, advanced packaging is today moving from a package substrate platform to silicon, a significant shift that is providing huge opportunities for giants like TSMC, Intel, and Samsung. These leading players can now flex their muscles in the advanced packaging market segment and emerge as key innovators of new advanced packaging technology.

In this dynamic and attractive context, Yole presents today its annual advanced packaging report, Status of the Advanced Packaging Industry. Compiled by the advanced packaging team at Yole, this analysis follows the evolution of the industry and offers an understanding of the market and key strategies of the leading advanced packaging companies. This report presents updated forecasts of the semiconductor(1) and the advanced packaging markets. It also points out the impact of COVID-19 on all market figures. In addition, the advanced packaging study highlights the US-China trade war and the related changes within the semiconductor business and supply chain.
In this 2020 edition of the report, Yole’s experts offer an impressive financial analysis of the top 25 OSATs. They combine different parameters to analyze the market positionings and strategies of each of the leading companies, including revenue, YoY growth, R&D, CapEx, gross profit, gross margin, net income, etc.… They also consider mergers and acquisitions and deliver possible scenarios for their evolution. The market research and strategy consulting company Yole presents today one of its most strategic reports.

In addition to a huge collection of advanced packaging reports and a dedicated quarterly market monitor, the company is covering the advanced packaging industry with its annual advanced packaging conference taking place in Wuxi, China on September 15: SYNAPS.
After a successful edition with more than 140 attendees in 2019, Yole and its partner NCAP China, offer this year again an attractive program with leading advanced packaging companies, including Besi, Camtek, Corning, Evatec, HiSilicon, JCET, SPTS Technologies, Tianshui Huatian Electronic, Xiamen Sky Semi., XMC… And strategic topics including glass substrate, fan-out, high-performance applications...
For one day, this both digital & onsite event will cover the overall advanced packaging industry. Be sure to be part of it and register today!

What is the status of the semiconductor industry? How has the advanced packaging industry evolved since last year? What are today’s key market drivers? Who are the advanced packaging players to watch, and what innovative platforms are they working on? What are the economic and technological challenges, after the COVID-19 outbreak? What is the ranking of the top OSATs: who are the winners? …Yole presents today a comprehensive overview of the advanced packaging industry.

In this highly competitive domain, TSMC especially has emerged as the leader in terms of developing an innovative advanced packaging platform from fan-out, namely InFO, to 2.5D Si interposer, CoWoS, to 3D SoIC. Based on current packaging revenue rankings, TSMC is #4 among the OSATs.
Meanwhile, other top OSATs such as ASE/SPIL, Amkor, and JCET are investing in various advanced SiP and fan-out technologies to increase their competition and their share of the advanced packaging market. IC substrate & PCB manufacturers, EMS companies, and display industry players are also entering the advanced packaging arena via panel-level fan-out packages, SiPs, and embedded dies (and passives) in organic substrates. This trend will continue in 2020 and beyond.
All these supply chain shifts and their related implications, as well as a production overview of more than 25 major packaging suppliers per advanced packaging platform, are summarized and analyzed in Yole’s advanced packaging report.
“Deeper insight into financial performance enables us to create a link between technology evolution, supply chain shifts, and the overall success of individual players in this changing landscape,”explains Santosh Kumar from Yole.

In 2019 the total IC packaging market was worth US$68 billion.
Advanced packaging accounted for US$29 billion and is expected to grow at a 6.6% CAGR between 2019 and 2025, reaching US$42 billion in value in 2025. At the same time, the traditional packaging market will grow at a 1.9% CAGR. And the total packaging market will grow at 4% CAGR from US$43 billion to US$85 billion in value.
“With a 6.1% CAGR between 2014 and 2015, the advanced packaging market is expected to more than double its revenue,” asserts Favier Shoo, Technology & Market Analyst at Yole. “At Yole we think this market should grow from US$20 billion in 2014 to about US$42 billion in 2025. This is almost triple the expected growth for the traditional packaging market, estimated at a 2.2% CAGR during the same timeframe.”
And Yole’s analysts do not stop their analysis there. They analyze in-depth the COVID-19 outbreak and its impact on the semiconductor industry, including the advanced packaging market. Indeed, due to the impact of COVID-19, the segment is expected to decrease by 6.8% YoY in 2020. However, Yole explains in its 2020 advanced packaging report that this market should rebound in 2021, with about 14% YoY growth. The highest CAGR revenue is expected from 2.5D / 3D TSV IC, ED in laminate substrate, and fan-out (21.3%, 18%, and 16%, respectively), as high-volume products further penetrate the market.
“We see many examples: fan-out in mobile, networking, and automotive; 3D stacking in AI/ML, HPC, datacenters, CIS , and 3D NAND; and ED in automotive, mobile, and base stations,” details Vaibhav Trivedi, Senior Technology & Market Analyst at Yole. And he adds: “In revenue, the mobile & consumer market segment constituted 85% of total advanced package revenue in 2019, and it will grow at a 5.5% CAGR to constitute 80% of advanced packaging revenue by 2025. Telecom & infrastructure is in revenue the fastest-growing segment with 13% growth between 2019 and 2025. At Yole, we estimate, this will constitute 14% by 2025 against 10% in 2019.”Vaibhav oversees the development of Yole’s Advanced Packaging Quarterly Market Monitor. He compiles and analyzes all market figures related to this industry.
The analysis is not complete without taking into account the automotive & transportation market segment. In terms of revenue, Yole’s report indicates a10.6% CAGR during the 2019 – 2025 timeframe. This market will reach almost US$1.9 billion in 2025, according to Yole.

Status of the Advanced Packaging Industry report and Advanced Packaging Quarterly Market Monitor, both explore in-depth the field of advanced packaging.
In parallel, SYNAPS is the annual place to be to get a comprehensive yearly prospectus of the latest market updates and technology developments.
Make sure to get a relevant understanding of this industry and follow us on i-Micronews.com.

The LIVE MARKET BRIEFING – Advanced Packaging Landscape in Post COVID Economy, dedicated to the advanced packaging industry is still available on i-Micronews.com. Take few minutes to register and watch the recorded version!


(1) Including memory and non-memory components as well as key system level demand: mobile, consumer, automotive, telecom and infrastructure.

Acronyms

CAGR: Compound Annual Growth Rate
AI: Artificial Intelligence
HPC: High-performance Computing
IoT: Internet of Things
OSAT: Outsourced Assembly and Test
IDM: Integrated Device Manufacturer
PCB: Printed Circuit Board
EMS: Electronics Manufacturing Services
ODM: Original Design Manufacturer
YoY : Year to Year
SiP : System in Package
IC : Integrated Circuit
TSV : Through Silicon Via
ED : Embedded die


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