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Advanced Packaging

2016 was a year of strong consolidation in the semiconductor industry, with many acquisitions in a wide variety of fields along with enormous transactions worth several billions of dollars. 2017 seems to be following the same path, with recent announcements in the advanced packaging industry that are motivated by the recent focus on innovative platforms like fan-out packaging.

In the last few years the advanced packaging industry has attracted more and more of the spotlight, transforming from a service industry for IC manufacturers into an innovation engine and a key field for the “More than Moore” philosophy, allowing semiconductors to progress further and further and create additional value in new applications. The industry’s market size perfectly illustrates this point: according to Yole Développement’s estimates, advanced packaging revenues represented more than $22B in 2016 and will increase to almost $30B by2020(1).

(Status of the Advanced Packaging Industry 2015 report, Yole Développement, Nov. 2015)

In this context, any M&A has significant impact. One example is the 2016 merging of ASE Group and SPIL under a holding company. Considering that advanced packaging is mirroring the semiconductor industry’s consolidation pattern, more of the same can be expected in 2017.

In fact the first bids were made quite recently. February 2 saw two major announcements in advanced packaging: Veeco entered into an agreement to acquire Ultratech for $815M, and Amkor Technology will acquire NANIUM (transaction value undisclosed).

The Veeco deal confirms equipment suppliers’ strong interest in advanced packaging and the potential of innovative platforms. Ultratech is the photolithography equipment market leader for fan-out packaging, which is currently the industry’s most dynamic platform (80% CAGR from 2015 - 2018 (2)) and reaping full benefit from the buzz surrounding the iPhone 7’s packaging processor being packaged with TSMC’s fan-out solution. The deal allows Veeco to attain an even stronger position in the advanced packaging market and enlarge their portfolio with photolithography capability.

(Fan-Out: Technologies & Market Trends 2016, Yole Développement, Aug. 2016)

The Amkor deal is further confirmation that players are getting bigger and bigger, and that fan-out is a hot commodity. This agreement is a win-win situation: for Amkor, purchasing Nanium allows the American giant to complete its fan-out know-how and benefit from almost 10 years of experience in wafer-level-packaging via Nanium’s eWLB production. And for Nanium, the deal allows this major European OSAT access to more funds and a bigger impact in the OSAT game, as they are now able to compete with Asian heavyweights.

2017 is already showing that the consolidation trend which commenced in 2015 could potentially continue, and that advanced packaging will be an exciting market for M&As. We look forward to further moves in the coming weeks and months.

(1) Status of the Advanced Packaging Industry 2015 report, Yole Développement, Nov. 2015
(2) Fan-Out: Technologies & Market Trends 2016, Yole Développement, Aug. 2016

Source: www.yole.fr 

RELATED EVENT

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Advanced Packaging & System Integration Technology Symposium
20-21 April, 2017 | Wuxi, China

This symposium is an unparalleled gathering of the leading executives from around the world discussing the timeliest issues, challenges and opportunities. During 2 days, all aspects including Fan Out Packaging, System in Package, Advanced Substrates, 3D Technology & Embedded Technologies, as well as MEMS & Sensors packaging, RF, Photonics... will be addressed in one conference, special sessions and key industrial talks. Also, there will be time for networking and a panel discussion.

More information on our website, or contact Camille (This email address is being protected from spambots. You need JavaScript enabled to view it.).

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