Fan Out Packaging Materials and Equipment Market - Forecast(2024 - 2030)

Fan Out Packaging Materials and Equipment Market Overview

The global Fan-out Packaging Materials and Equipment Market is estimated to grow at a CAGR of 16.09% during the forecast period 2022-2027 and reach $3,418.7 million by 2027, from around $1,318.2 million in 2021. Cloud infrastructure, 5G, autonomous driving, and the artificial intelligence revolution will shape the packaging trend during the forecast period thereby contributing to the Fan-out Packaging Materials and Equipment Market. Omron stated that Level3 autonomous vehicle by 2020, Level4 will be achieved goal by 2025. In 2021, GM announced an increase in its budget for electric and automated vehicles from $20 billion to $27 billion and plans to launch 30 new EVs globally in the next five years. GM announced that it will launch 5G-enabled cars in China followed by the US region in 2022. Furthermore, collaborations with telecom operators are helping automakers deploy cars with embedded connectivity faster than before this is set to boost the market growth rate during forecast period 2022-2027.

Fan Out Packaging Materials and Equipment Market Report Coverage

The report: “Fan Out Packaging Materials and Equipment Market – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Fan Out Packaging Materials and Equipment market

Key Takeaways

• Semiconductor packaging assembly and testing is an important manufacturing step necessary to create electronic products. Fan-out packaging is evolutionary step, an advance on the fan-in CSP used in so many relatively low pin count chips.
• Initially developed independently by Freescale and Infineon around 20 years ago, and subsequently licensed and developed by multiple OSATs, fan-out packaging is analysed to grow at significant rate during forecast period.
• The growing innovations in ICT technologies such as 5G, cloud infrastructure, HPC applications are analysed to be the key driving factors for the market during forecast period 2022-2027.
• The growing demand of fan-out packaging materials and equipment in various application such as Power Management Integrated Circuits (PMICs), Radio-Frequency (RF) Transceivers, Connectivity Modules  and others is set to boost its market growth in the upcoming years.
• Key players in the Fan-Out Packaging Materials and Equipment Market are TSMC, ASE Group, JCET Group and others. The market is consolidated by few major companies and the major development strategies adopted by these companies are mergers, product launches among others.

Fan Out Packaging Materials and Equipment Market, By Region, 2021

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Fan Out Packaging Materials and Equipment Market Segment Analysis – By Type

Fan-out packages consist of dies and redistribution layers in which the redistribution layers are the copper metal interconnects that electrically connect one part of the package to the other.  The growing semiconductor industry coupled with the increasing investment by various government bodies is set to boost its market growth in the future. As a part of this, in December 2021, the government approved a Rs 76,000-crore to boost semiconductor and display manufacturing in the country in an bid to position India as a global hub for hi-tech production, and attract large chip makers. In July 2021, the US Senate has passed a landmark bill that would unlock an eye-watering $52 billion to boost the national production of semiconductors. The investment is part of a wider package of about $250 billion that covers scientific endeavors ranging from artificial intelligence to quantum communications, called the US Innovation and Competition Act. Core Fan-Out segment of Fan-Out Packaging Materials and Equipment Market generated a revenue of $308.6m in 2021 and is projected to reach a revenue of $431.51m by 2027 growing at a CAGR of 4.29% during 2022-2027.

Fan Out Packaging Materials and Equipment Market Segment Analysis – By Application

Power Management Integrated circuits is dominating the market in 2021 at 22.3% share. The growing ICT sector is the major factor contributing to the market growth rate. The Ministry of Industry and Information Technology (MIIT) of China, stated that the added value of electronic information manufacturers with annual operating revenues rose about 3.09 million U.S. dollars indicating 19.8% year on year, with the compound annual growth rate reaching 12.5% over the past two years. In August 2021, Samsung Group has unveiled a $205 billion expansion over three years. In 2021, Xiaomi announced expansion of smartphone, TV capacity in India with 3 new plants to meet the demand in the country. In 2021, South Korea unveiled ambitious plans to spend roughly $450 billion to build the world’s biggest chipmaking base over the next decade, joining China and the U.S. in a global race to dominate the key technology. These investments are analyzed to contribute to the market growth rate.

Fan Out Packaging Materials and Equipment Market Segment Analysis – By Geography 

APAC dominated the Fan-out Packaging Materials and Equipment Market with a value share of approximately 76% in 2021, Asia-Pacific region incorporates chief economies of the Asian region, namely Taiwan, China, India, Japan and so on. As stated by Invest in India, the global electronics market is estimated to be over $2 tn. India, one of the largest electronics markets in the world anticipated reaching $400 bn by 2025. This is set to contribute to the market growth rate during forecast period 2022-2027. In November 2021, Amkor technology announced its plans to expand its advanced packaging technology capacity by building a new factory in Bac Ninh, Vietnam. Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, and major supplier to Apple Inc., stated that it is planning a $100bn investment in the expansion. As a part of this, it has started expansions in Taiwan, Japan, US. These expansions by the major Fan-out Packaging Materials and Equipment manufacturers is set to boost the market growth rate during forecast period 2022-2027. 

Fan Out Packaging Materials and Equipment Market Drivers 

Introduction of ECP (Encapsulated Chip Package) technology in Fan-Out Packaging Solution

The Introduction of ECP (Encapsulated Chip Package) technology in Fan-Out Packaging Solution is set to drive its market during the forecast period. Electronics miniaturization in the form of integrated circuits has become an indispensable part of our lives since the advent of the Internet and multimedia. The rapid development of integrated circuits is dependent on advancements in not only chip design and manufacturing, but also chip packaging, to ensure its long-term operation and reliability. Unlike other packaging processes that use wafer reconstitution molding compounds, ECP technology is an advanced chip-first and face-down packaging process. Instead of the traditional liquid or powder molding compound, the ECP process employs a laminating molding film. Moreover, the lamination process replaces the wafer molding process for ultra-thin chip packaging. The lamination process allows reconstituted wafers to achieve a high degree of flatness while avoiding wafer cavities. Furthermore, when compared to liquid or powder compounds for wafer molding, it can effectively reduce chip offset and achieve small-size, high fan-out ratio packaging. In addition, the silicon support on the backside of the reconstituted wafer can effectively reduce warpage and overcome warpage-related problems owing to the unique ECP process and the low modulus characteristics of the lamination film. ECP technology not only enables fan-out, single-chip, and multi-chip packaging, but also five-sided package protection. It has a small size and a high fan-out ratio, allowing it to effectively overcome wafer warpage.

Rising Automotive and Industrial Applications

Surge in rise of Automotive and Industrial applications is driving the Fan-Out Packaging Materials & Equipment Market growth. The current automotive market for the integrated circuit (IC) packaging industry has grown significantly owing to the increasing demand for automation and higher performance in vehicles. These changes in the automotive market set to allow cars to become more reliable and intelligent. To meet the increasingly complex demands of the automotive market, the semiconductor packaging industry is shifting its focus to prioritize the development of advanced packages for next-generation automotive market requirements. Wire bond packages are typically used for automotive integrated circuits. The packaging industry is shifting toward high performance flip chip and advanced fan-out packages for automotive infotainment, GPS, and radar applications as the complexity and performance requirements of automotive applications increase. For instance, ASE Group established a FO-WLP line in Kaohsiung, Taiwan, with other major OSATs in production or planning their fan-out packaging launch phases. In addition, according to Powertech Technology Inc., Fab 3 in Hsinchu Science Park set to be the world's first fab to commercially use fan-out panel-level packaging (FOPLP) technology. Furthermore, the expanding market for fifth generation (5G) wireless communication and high performance computing has allowed manufacturers to develop newer technologies. For example, TSMC, as the sole leader in the High-Density Fan-out segment, intends to expand its FO-WLP segment into technologies such as inFO-Antenna-in-Package (AiP) and inFO-on-Substrate (oS).

Fan Out Packaging Materials and Equipment Market Challenges

High Manufacturing Cost

High Manufacturing cost owing to war page causing differential shrinkage of material during FOWLP set to restrict the growth of the Fan-Out Packaging Materials & Equipment Market. Fan-out wafer-level packaging (FOWLP) has numerous advantages over other packaging technologies. FOWLP is one of the smallest packaging options, but unlike fan-in wafer-level packaging, the IO count is not limited to the die area. FOWLP's popularity is growing as a result of these benefits. While the cost of FOWLP is usually quite high, there are still opportunities for future cost savings. Many FOWLP suppliers are looking into panel-based manufacturing as an alternative to the current wafer-based approach.

Fan Out Packaging Materials and Equipment Market Landscape

The  Fan Out Packaging Materials and Equipment market is moderately consolidated with key players are adopting strategies such as acquisition, product launches and others with the players  and companies prevalent in the market. The top companies present in the market include the below.

1. TSMC
2. ASE Group
3. JCET Group
4. Amkor
5. PTI
6. Nepes Laweh
7. Samsung Electronics
8. Evatec
9. Camtek
10. Atotech

Launches/Acquisitions

• In July 2021, Atotech announced that it was being acquired by MKS Instruments
• In August 2020, TSMC and Synopsys collaborated to  deliver certified design flows for advanced packaging solutions using the Synopsys 3DIC Compiler product for both silicon interposer based Chip-on-Wafer-on-Substrate (CoWoS®-S) and high-density wafer-level RDL-based Integrated Fan-Out (InFO-R) designs.

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