Key Findings
According to a recent report by Yole Group, the global advanced packaging market is poised for significant growth, projected to more than double from $55 billion in 2025 to over $120 billion by 2031. This remarkable expansion is primarily driven by the structural shifts underpinning the next generation of artificial intelligence (AI) and high-performance computing (HPC) systems, which demand increasingly sophisticated chip integration technologies.
Technical & Market Details
The report highlights that advanced packaging technologies are indispensable for achieving the performance benchmarks required by future AI and HPC applications. Critical bottlenecks within the current supply chain include TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) capacity, Ajinomoto Fine-Techno’s ABF (Ajinomoto Build-up Film) substrate materials, and Nittobo’s T-glass products. These components are essential for integrating high-bandwidth memory (HBM) with logic dies, a cornerstone for AI accelerators, and their limited supply constrains market expansion. Advanced packaging, encompassing technologies like 2.5D/3D integration and chiplets, is vital for achieving the high interconnect density and power efficiency demanded by modern AI processors.
Leading OSAT (Outsourced Semiconductor Assembly and Test) providers such as ASE, Amkor, and PTI, alongside memory giants like SK hynix and substrate manufacturers Ibiden and Unimicron, are aggressively investing in capacity expansion to meet this burgeoning demand. However, these investments are anticipated to fully alleviate supply constraints only by 2027-2028, indicating that short-term supply shortages will continue to be a significant challenge for the industry.
Background & Context
The rapid advancement in AI and HPC has created new challenges that traditional packaging methods cannot address. The exponential increase in AI workloads in data centers necessitates higher bandwidth, lower latency, and improved power efficiency, leading to an unprecedented demand for advanced packaging solutions. This structural shift has catalyzed the growth of the advanced packaging market, simultaneously exposing bottlenecks across the entire supply chain. The concentration of high-performance substrate materials and specialized packaging equipment among a limited number of suppliers makes the ecosystem particularly vulnerable to supply shocks.
Strategic Significance & Outlook
The continued growth of the advanced packaging market is set to accelerate innovation across the semiconductor industry, enabling further evolution of AI technologies. While supply constraints pose immediate challenges, ongoing substantial investments by key industry players are expected to foster a more resilient and diversified supply chain in the long run. Technologies such as heterogeneous integration, 2.5D/3D packaging, panel-level packaging (PLP), and hybrid bonding are identified as key drivers for future market growth. The synchronized evolution of technological innovation and capital expenditure will be crucial in pushing the boundaries of semiconductor performance in the AI era.
Source: https://advancedpackaging.news/article/124770/Advanced_packaging_market_to_top_120B
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