Advanced Packaging Market Expected to Grow at 11% CAGR by 2028

The advanced IC substrate market is expected to grow at an 11% CAGR from $15 billion in 2022 to nearly $34 billion in 2028, according to a report by Yole Developpement.

Currently, Asian companies, especially Taiwanese companies, dominate IC substrate revenue with 93% of the market. These companies have entered the advanced substrates market to supply the growing demand from AI companies, as well as from the 5G and automotive sectors.

All market participants are making significant investments to meet these requirements and accommodate the escalating demand. This includes the development of new technologies and materials to keep pace with the evolving demands of the market and the needs of end customers.

Yole forecasts the Substrate-Like PCB (SLP) market to climb from $2.9 billion in 2022 to $3.6 billion by 2028. This market is primarily rooted in high-end smartphones, where SLP adoption is most prevalent. However, the higher price associated with SLP has hindered widespread adoption for mass-market products.

Despite this, the SLP market is projected to experience gradual growth over the next five years, driven by the increasing demand for 5G smartphones and potential adoption in the medical and automotive sectors. Taiwanese companies, such as ZD Tech, Compeq, and Unimicron, dominate the SLP market, commanding almost 60% of the total revenue in 2022.

While the centre of advanced IC substrate manufacturing is currently in East Asia, with Taiwan, South Korea, and Japan playing pivotal roles, China is making substantial strides with unprecedented investments, positioning itself for future market dominance. Japanese players like Meiko and Ibiden hold considerable market shares and serve as key SLP suppliers to Samsung. Chinese players, such as AKM Meadville and KinWong, are gradually entering the market to cater to domestic demand from Huawei, Xiaomi, and Oppo.

To diversify supply chains and bolster local resilience in Europe and the US, more companies are contemplating investments in the advanced substrate industry. Local government incentives may further stimulate this trend, particularly in the US and Europe. However, the production of advanced substrates will remain highly concentrated in Asia, with AT&S being the solitary contender in Europe.