Advanced Chip Packaging Sales Expected to Double
Chip assembler ASE anticipates its advanced packaging sales will double to $3.2 billion this year, driven by high demand for AI chips. This rapid growth highlights how advanced packaging has become a critical, and potentially constraining, infrastructure layer for the semiconductor industry. The capability is now a key factor impacting both supply chain velocity and customer deployment readiness for AI solutions.
- The advanced packaging market is projected to grow from approximately $47.41 billion in 2024 to $97.48 billion by 2035, with some analysts predicting it could reach $80.5 billion by 2033, driven by the proliferation of AI chips. This growth significantly outpaces the traditional packaging sector. - This technology moves beyond single-die packages by aggregating multiple components—like processors and memory—into a single electronic device, using techniques like 2.5D, 3D-IC, and System-in-Package (SiP). This approach is critical for continuing the trend of miniaturization and performance gains as traditional chip scaling (Moore's Law) slows. - Key players dominating the advanced packaging landscape include foundry giant TSMC with its CoWoS technology, and Outsourced Semiconductor Assembly and Test (OSAT) providers like ASE Technology and Amkor Technology. Intel and Samsung are also major innovators with their Foveros (3D) and EMIB (2.5D) technologies, and H-Cube/I-Cube solutions, respectively. - The demand from AI and high-performance computing (HPC) is a primary catalyst, as these applications require high-bandwidth memory (HBM) to be placed very close to processing units to reduce latency and power consumption. Advanced packaging is the key enabler for integrating HBM with GPUs and other AI accelerators. - The Asia-Pacific region, particularly Taiwan, South Korea, and China, is the hub for advanced packaging, accounting for the largest market share and hosting the majority of OSAT providers and advanced packaging facilities. However, significant investments are being made in the U.S., such as Amkor's planned facility in Arizona, to bolster the domestic supply chain. - Despite rapid growth, the industry faces significant bottlenecks, with advanced packaging capacity—not wafer production—becoming the primary constraint limiting the supply of AI chips. This has led to long lead times and has made packaging capability a critical factor in the semiconductor supply chain.
