Yole Reports Growth in Advanced Packaging Market

Over the period from 2023 to 2029, the advanced packaging market is projected to experience a compound annual growth rate of 11 percent, reaching a value of approximately US$69.5 billion by 2029. This growth rate surpasses that of the overall IC packaging market and is being primarily driven by increased corporate investments and regional subsidies, according to insights from Yole.

The market's evolution is marked by a shift as OSATs (outsourced semiconductor assembly and test) and major chip manufacturers like Intel and TSMC focus on embracing chiplet and heterogeneous integration technologies. This strategic move is aimed at enhancing performance and efficiency in semiconductor packaging.

Yole's analysis indicates that the top five players in the advanced packaging sector, ranked by revenue, include ASE, Amkor, TSMC, Intel, and JCET. These key industry players are at the forefront of driving innovation and shaping the future of advanced packaging technologies.

Back in 2023, when the advanced packaging market was valued at around US$38 billion, it accounted for 44 percent of the total IC packaging market. However, the segment has been outpacing the broader market growth due to increasing demand in areas such as artificial intelligence, high-performance computing, automotive electronics, and AI-powered personal computers, as highlighted by Yole.

"India is emerging as a significant hub for OSAT activities, attracting substantial investments in semiconductor manufacturing, packaging, and testing infrastructure," noted Bilal Hachemi. "Meanwhile, Malaysia, with its well-established semiconductor ecosystem, is becoming a preferred destination for companies looking to relocate from China. Vietnam is also witnessing a surge in semiconductor investments, particularly in OSAT and packaging, driven by strategic collaborations with the United States following the CHIPS and Science Act."

Leading semiconductor players like TSMC have embraced an integrated business model that combines front-end manufacturing with advanced packaging, enabling them to capture more value in the chip manufacturing process. Similarly, Samsung has integrated advanced packaging solutions into its memory and foundry operations, while Intel is strategically positioning advanced packaging as a key component of its foundry services.