Semiconductor & IC Packaging Materials Market Report 2025 (Global Edition)

Market Dynamics of semiconductor and IC packaging materials Market

How the semiconductor and IC packaging materials Market is growing ?

• The electronics industry is a major growth driver for the semiconductor and IC packaging materials Market growth

A significant portion of the semiconductor and IC packaging materials market is accounted for by the electronics sector. Chip design and production capabilities are growing in the electronics sector. The endeavors encompass augmenting the number of chip designers and engineers, renovating current chip manufacturing establishments or constructing novel ones, embracing sophisticated chip process technologies and apparatus, and formulating more efficacious chip design techniques. Encourage government and business support: To portray the significance of the electronics sector to the economy and society at large, the industry is interacting with various governments and other industry players. To guarantee semiconductor chips' dependability, performance, and integration into electronic devices, semiconductor packaging—a critical component of the electronics manufacturing process—involves enclosing the chips in useful and safe containers. By offering heat control, environmental protection, and electrical connections, these packages act as a link between the small, delicate semiconductor chips and the larger electronic systems. From conventional leaded packages to sophisticated flip-chip, system-in-package (SiP), and three-dimensional (3D) packing, semiconductor packaging technologies have improved dramatically to fulfill the demands of smaller, quicker, and more efficient electronic devices. For instance, in August 2022, Intel demonstrated the most current architectural and packaging advances that enable 2.5D and 3D tile-based chip designs, ushering in a new era in chipmaking technologies and their relevance. Intel's system foundry architecture has improved packaging, and the firm plans to raise the number of transistors on a package from 100 billion to one trillion by 2030. 

From data centers and automobile electronics to smartphones and Internet of Things devices, these packaging advancements are essential to the operation of many contemporary applications. Apple, an American electronics company has signed long-term contracts and partnerships with several of its key suppliers—such as TSMC, LG Display, and Sony—to secure the supply of chips, displays, and cameras for its devices. For instance, In June 2021, Samsung announced a new lineup of chipsets for its next-generation 5G solutions and products, including the Compact Macro, Massive MIMO radios, and baseband units, all of which would be commercially available in 2022. Such developments boost the adoption of Semiconductor & IC Packaging Materials. Thus, the electronics industry has played a major role in driving the growth of the semiconductor and IC packaging materials market.

• Advanced packaging technology has boosted the demand for the Semiconductors and IC Packaging Materials Market 

With the advent of advanced packaging, which combines parts from different wafers and applies cutting-edge technologies to produce a single electrical device with better performance, this paradigm may be altered. Advanced packaging is currently receiving a lot of traction as the next big development in semiconductor technology. The need for semiconductors that power cutting-edge applications that are already becoming commonplace, such as 5G, driverless cars, and other Internet of Things technologies, virtual and augmented reality, is being met in part by advanced packaging. High-performance, low-power CPUs with fast data processing speeds are needed for these applications. Because of this, the front end of chip production is seeing a slowdown in technological advancements, and a die's performance and maximum size are becoming increasingly constrained. An encouraging remedy is provided by novel back-end technological strategies that integrate several chips. Over the last twenty years, several advanced packaging techniques have emerged to fill the gap left by the wire-bonding and flip-chip technologies of the preceding fifty years. These approaches include 2.5-D, 3-D, fan-out, and system-on-a-chip (SoC) packaging.

Major companies and quick followers—entities that copy the inventions of competitors—are creating and marketing sophisticated packaging in a variety of ways to attract high-end clients because it has a greater value potential than standard back-end packaging. Advanced packaging is the aggregation and interconnection of components before traditional integrated circuit packaging where a single die is packaged. Advanced packaging allows multiple devices (electrical, mechanical, or semiconductor) to be merged and packaged as a single electronic device. Unlike traditional integrated circuit packaging, advanced packaging employs processes and techniques that are typically performed at semiconductor fabrication facilities.  For instance, in 2024, TSMC, formally known as Taiwan Semiconductor Manufacturing Co. announced that it would launch advanced chip packaging units in Japan witnessing the high demand for advanced chip packaging. For instance, in 2024, Samsung Electronics announced that it expects $100 million or more of revenue from its advanced chip packaging business in 2024.  Therefore, advanced technology is a major growth driver for the Semiconductors and IC Packaging Materials Market.

Prevalence in the Automotive Industry will further create opportunities for the Semiconductors and IC Packaging Materials Market 

The growing need for automation and improved performance in automobiles has led to considerable growth in the integrated circuit (IC) packaging industry's automotive sector. Cars will be more dependable and smarter as a result of these advancements in the automotive industry. The semiconductor packaging industry is reorienting its priorities to emphasize the development of innovative packages for the needs of the next-generation automotive market to meet the ever-more-complex demands of the automotive sector. Wirebond packages have historically been used for automotive integrated circuits. For vehicles, GPS, and radar applications, the packaging industry is shifting toward high-performance flip chips and sophisticated fan-out packages due to the growing complexity and performance demands of automotive applications. Advanced packaging options can reduce the bottlenecks for the flow of data, speeding up response time for critical systems, particularly accident avoidance in autonomous and driver-assisted vehicles. For instance, in October 2023, Hyundai Motor Company and Kia Corporation today signed a strategic partnership with global semiconductor major, Infineon Technologies AG, to secure power semiconductors for meeting the growing demand for electric vehicles (EVs) worldwide. Under the agreement, Hyundai and Kia will purchase core power semiconductors of automotives, including diode, insulated-gate bipolar transistor (IGBT), and silicon carbide (SiC) power modules. Harsh environmental conditions and an almost constant assault of vibration, electromagnetic interference, and thermal extremes make packaging critical to protect the chips which further create lucrative demand for the Semiconductors and IC Packaging Materials Market.  For instance, in 2023, Toyota, Honda, and Nissan came together to Develop Automotive-Use Semiconductors. This was formed to research and develop high-performance digital semiconductors for use in automobiles. Therefore, the Automotive Industry is a bright stop to create lucrative opportunities in the Semiconductors and IC Packaging Materials Market.

Restraints of Semiconductors and IC Packaging Materials Market 

• The challenge of keeping up with new technology could increase complexity in production for the Semiconductors and IC Packaging Materials Market 

Smaller, more streamlined devices with ever-increasing capabilities are in high demand due to consumer expectations, which fuel the persistent quest for technical innovation. This demand puts a lot of pressure on the packing of IC chips, which forces engineers to pack more functionality into smaller regions. For various uses, from wearables to Internet of Things (IoT) devices and beyond, smaller form factors are essential, not just desirable. There is an increasing demand for small, high-performance IC chip packaging as the world moves closer to an IoT and edge computing future. These trends, along with the broad range of end types of equipment emerging, require a large diversity of new IC package types to meet specific applications or markets. As electronic devices become smaller and more compact, semiconductor packaging materials must keep pace. Increased device complexity will generate an explosion of new creative and disruptive technology packaging solutions, and in some markets and applications, packaging technology will become a key differentiator when making a purchasing decision. For instance, in 2023, Lam Research launched a solution to address challenges in the advanced manufacturing of semiconductors, the Coronus DX solution which aims to address manufacturing challenges in next-generation logic, 3D NAND, and advanced packaging applications.
Therefore, the complexity of continuously updating the technology is seen as a restraint.

Impact on COVID-19 

The worldwide supply chain, which includes the packaging and manufacture of semiconductors, experienced interruptions during the pandemic's early stages. Packaging material shortages and longer lead times resulted from this. Demand for consumer electronics and home entertainment items grew, whereas demand for some industries, such as automotive and aerospace, declined as a result of lower output and consumer expenditure. This change in demand therefore affected the need for semiconductor and integrated circuit packaging materials. As remote employment, online education, and telecommunication services grow in popularity, the epidemic brought attention to the significance of digital infrastructure. During the peak of the COVID-19 pandemic, there was a scarcity of semiconductors that affected everything from vehicles to gaming consoles; nevertheless, in certain areas of the market, there was an abundance of chips. The market for goods like computers and smartphones vanished as soon as businesses started hoarding chips to increase their stockpiles. This was due to the slowing economy. The manufacturing of automobiles was severely impacted by the significant scarcity of semiconductors. For instance, in 2020, Taiwan Semiconductor Manufacturing Company (TSMC), the largest chipmaker globally, had a 23.3% decrease in net income during the second quarter of the year compared to the previous year. That was the company’s first quarterly decline in four years.
 

Our study will explain complete manufacturing process along with major raw materials required to manufacture end-product. This report helps to make effective decisions determining product position and will assist you to understand opportunities and threats around the globe.

The Global Semiconductor & IC Packaging Materials Market is witnessing significant growth in the near future.

In 2023, the Flip Chip segment accounted for noticeable share of global Semiconductor & IC Packaging Materials Market and is projected to experience significant growth in the near future.

The Automobile Industry segment is expected to expand at the significant CAGR retaining position throughout the forecast period.

Some of the key companies Alent, Kyocera Chemical and others are focusing on its strategy building model to strengthen its product portfolio and expand its business in the global market.

Frequently Asked Questions