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Market Growth for Packaging Materials

Advanced Packaging Unit Growth Drives Material Consumption

By Jan Vardaman (TechSearch International) and Dan Tracy (SEMI)

Following a record year in terms of semiconductor sales and unit shipments, 2011 turned into a lower growth year than initially expected with several challenges emerging for the packaging material suppliers. First, there was the Tohuku earthquake and tsunami in March that severely disrupted the packaging materials supply chain. Numerous key suppliers lost production capability for several weeks and longer. While the supply chain recovered by the second quarter, a slowing global economy reduced the outlook for the semiconductor industry growth for the year. Finally, higher raw material costs, such as pricing for gold, silver, tin, and copper metal, put the squeeze on supplier’s margins as customers pushed for lower cost material solutions for their packaging needs.

Packaging technology continues to be an important industry segment enabling growth in electronics that are increasing in functionality in a mobile form factor. Important growth areas in packaging include chipscale packaging (CSP)— both laminate and leadframe based, stacked-die and other 3-D packaging form factors, wafer-level packaging (WLP), power device packaging, LED packaging, and other system-in-package (SiP) type technologies. The outlook for advanced packaging continues to remain strong, and this includes ball grid array (BGA), CSP (including leadframe-based), flip chip, and WLP packages. And it will be new materials that will enable packaging technologies to deliver solutions in terms of meeting demanding performance and reliability requirements.

In total, the semiconductor packaging materials covered in this investigation are forecasted to grow from $22.2 billion in 2011 on a global basis to $24.6 billion in 2015, excluding thermal interface materials. Steady unit growth is expected through 2013 for key segments of the packaging materials market.

Packaging Material Segment

Unit growth rates from the segments highlighted in the table for 2010 through 2013 range from a compound annual growth rate (CAGR) of 5.7% for total leadframes to 25 percent for the total underfill market:

  • The growth rate for flip chip CSP laminates will be strong.
  • While overall all leadframe units will grow in the single digits, leadframe CSP and LED packages will have stronger growth.
  • Die attach film (DAF) market continues to experience strong unit growth, though revenues will grow at lower rates with more competition in the market.
  • The main application for underfill remains is flip chip. Underfill materials are also used with some wafer level packages (WLP), chip scale packages (CSP), and ball grid array (BGA) depending on board reliability requirements.

Advancements and changes continue in the semiconductor packaging materials market to meet performance and reliability requirements. Materials will provide solutions for the industry as devices fabricated with advance silicon technologies are introduced to the market. Materials will enable shrinkage to finer lines and spaces in the package; improved reliability and warpage control in packages; handling of thinner die and packages; fabrication of embedded electronic components; and more.

All of the information in this article was derived from a recently completed market research study, Global Semiconductor Packaging Materials Outlook—2011-2012 Edition, produced by SEMI and TechSearch International. In developing this report, over 150 in-depth interviews were conducted with semiconductor manufacturers, packaging subcontractors and packaging materials suppliers throughout the world.

TO ORDER YOUR COPY of Global Semiconductor Packaging Materials Outlook—2011-2012 Edition, please contact Dr. Dan P. Tracy, research development director, Industry Research and Statistics, SEMI via email at dtracy@semi.org, or telephone 1.408.943.7987 or facsimile 1.408.943.7915. You can also click here for pricing, and ordering information.

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