How can advanced packaging decrease semiconductor market uncertainty and enable future semiconductor products?
From supporting technology to enabler of future semiconductor products
Future semiconductor drivers are expected to be fragmented and more diverse than in the mobile era. Scaling continues, but functionality and system level features are becoming increasingly important for product differentiation rather than raw computation power. An outlook into the future brings the Internet of Things (from end device to backbone infrastructure), including the Industrial Internet of Things, the semiconductorization of the automotive industry, 5G connectivity, augmented & virtual reality and artificial intelligence. In such an environment, advanced packaging is transforming from follower of scaling technology nodes to enabler of future semiconductor applications and products. Heterogeneous integration of multiple dies from the latest to legacy front-end nodes, involving a mixture of latest technology high density interconnects to lower cost mature interconnects, at high levels of customization is the future of packaging. Advanced packaging has direct impact on product success rates and semiconductor revenues.
Advanced packaging is experiencing a total revenue CAGR 2016-2022 of 7%, higher than the total packaging industry (3-4%), semiconductor industry (4-5 %), PCB industry (2-3%) and generally the global electronics industry (3-4 %) and global GDP (2-3%). The fastest growing advanced packaging platform is Fan-Out with 36% followed by 2.5D/3D TSV with 28%. Fan-Out is expected to exceed 3$B by 2022 while 2.5D/3D TSV is expected to exceed 1$B by 2021. The FC platform is by far the largest, accounting for 81% of advanced packaging revenue with 19.6 $B in 2017, however a lower 5% revenue growth indicates that penetration of primarily Fan-Out packages will decrease FC market share to 74% by 2022. The revenue forecast translates to an advanced packaging wafer forecast of 8% and a 9% unit count, CAGR 2016-2022. Advanced packages will continue to dominantly address high end logic and memory in computing and telecom, with further penetration in analog and RF in high end consumer/mobile segments, while eyeing opportunities in growing automotive and industrial segments.
The following report takes a look at the field of advanced packaging and serves as a yearly overview of the latest market and technology developments. The report first summarizes the drivers for advanced packaging and latest market dynamics followed by packaging technology evolution with short and long term roadmaps. Furthermore, it provides a deep analysis of the supply chain including player positioning and strategy and production per player (revenue, wafers). The supply chain analysis includes a thorough financial analysis of TOP 25 OSATs. The report wraps up by providing revenue, wafer and unit forecasts per packaging platforms along with an analysis of future production and developments in the timeframe 2017-2022.
The scaling and functional roadmaps give further rise to advanced packaging
There are several dynamics shaping the advanced packaging market and its evolution. Going forward, two types of roadmaps need to be considered – scaling and functional roadmap. When it comes to scaling, advanced packaging is given the task to enable further packaging of ICs in sub 10nm technology nodes. IC I/O pitch does not seem to be an immediate concern. Within the FC platform, Cu pillars are further increasing market share over FC solder balls, from 59% to 66% utilized FC wafers, 2016 to 2022. Standard bump pitch currently in volume is between 130-150 µm, however Cu pillars already exhibited volume production with 30 um pitch which is expected to be sufficient for the 7nm node and perhaps beyond. The more critical point lies within adopting interconnect technology below L/S <10/10 µm. The report describes in more detail the competition between advanced FC substrate and WLP until L/S 5/5 µm as well as WLP vs. 2.5D/3D technology below L/S 5/5 µm. Furthermore, a long term outlook is given until 2030. On the other hand, within the functional roadmap, most ICs are expected to stay above the 20nm node. Here, cost is more of a concern and advanced packages are facing increasing competition from mature wirebonded packaging as well as modified leadframe packages such as fcQFN. The ratio of cost, power consumption and only then performance will be a key decision making factor here case by case.
Furthermore, some of the key packaging market dynamics are brought into perspective, such as:
- Impact of longer front end scaling cycles
- Competing platforms and technologies in the scaling roadmap below L/S 10/10 µm
- Package substrate vs. WLP
- WLP vs. 2.5D/3D
- Transition from Wirebonded to FC packages
- Introduction of panel level packaging
- Impact of QFN on advanced packaging growth
Supply Chain shifts are resulting in new business models
The shifts in the semiconductor supply chain are results of preparations for future uncertainty, and search for other value flows. Several M&As have been made in attempt to offer a more complete and diversified portfolio, while keeping control of costs and potential losses. Furthermore, in search of additional revenue, new business models are appearing or expanding. Top OSATs are progressing further down the WLP road, but some are also strengthening module production in order to cover a wide range of assembly technologies. EMS companies are eyeing entrance to the OSAT model with “module like” multi die packaging. Advanced board manufacturers are developing as packaging suppliers. Meanwhile, Intel, an IDM remains the advanced packaging leader and TSMC, formerly solely a foundry, is now entering top 10 packaging houses by revenue thanks also to the success of the InFO package. The advanced packaging market is dominated by large IDMs such as Intel and Samsung, 4 large global OSATs and foundry and packaging house TSMC, accounting for 62% of the advanced packaging market. The packaging market as a whole is differentiated by players in several categories: large volume with advanced and mature technologies combined, smaller volume but specific advanced technology and a long tail of mature technology suppliers. Further supply chain shifts, implications thereof as well as production of >25 major packaging suppliers per advanced packaging platform are summarized and analyzed in the report.
Financials reveal the success of different strategies
A deeper insight into the financial performance enables to create a link between technology evolution, supply chain shifts and overall success of individual players in this changing landscape. TOP 25 OSATs are examined by revenue, R&D investment, CapEx, gross profit/margin and net income. A distinctive pattern of growth is visible from China based OSATs due to acquisitions and capacity increase – Nantong Fujitsu doubled revenues in 2016, while JCET and Tianshui Huatian exhibited YoY revenue growths of 62% and 35%, respectively. The largest OSATs involved in advanced packaging, ASE, Amkor, JCET/STATS ChipPAC, Powertech exhibited positive growths and net margins, while UTAC continues to exhibit net losses and decreasing cash flow. The report contains a deeper insight and financial evolution of TOP 25 OSATs from 2013-2016.
Overview of advanced packaging in the new semiconductor era:
- Short term and long term outlook, with roadmaps
- Impact of FEOL on advanced packaging
- Analysis per platform, forecasts and future development
- Competition, disruption and opportunities
- Complete overview of shifting business models
- Production splits per manufacturer
- Detailed financial analysis of TOP 25 OSATs