Market Trends of 2.5D & 3D Semiconductor Packaging Industry
Communications and Telecom End-user Industry is Expected to Hold Significant Market Share
- Communications and telecom represent one of the fastest-growing segments of the market. The amount of data generated worldwide is increasing at a rapid pace. The explosion of data is fueled by many embedded devices that produce a small amount of data for each discrete transaction and add up to big data when clubbed together. Organizations collect data from various sources, including smart (IoT) devices, business transactions, industrial equipment, social media, etc.
- Organizations worldwide are looking to benefit from processing and acting upon data quickly. High-performance computing (HPC) has enabled businesses to scale computationally to build deep-learning algorithms that may take advantage of high volumes of data. As more data emerges, the need for more significant amounts of computing resources emerges, leading to greater adoption of HPC, which drives the market's growth. With the proliferation of high-performance computing, there is an escalating demand for semiconductor devices that deliver enhanced performance, lower latency, increased bandwidth, and power efficiency, creating significant demand for 2.5D and 3D packaging technologies.
- Communication base stations play a pivotal role in ensuring a robust communication ecosystem for mobile devices, including phones and smartphones. Given its high frequencies, 5G technology may efficiently manage vast data volumes at remarkable speeds, requiring a denser network of base stations. In contrast to 4G LTE, 5G base stations feature more transmitting antennas and components, leading to increased power consumption and heat generation.
- According to the GSMA, in 2025, the share of 5G mobile connections of total connections in South Korea and Japan are anticipated to account for 73% and 68%, respectively. About 95% of mobile connections will be 5G by 2030 in GCC states and 93% in Asia. The increasing adoption of 5G smartphones and networks creates new market opportunities.
- The telecom industry continually advances data transmission speeds, driven by technologies such as 5G and its successors. These innovations demand robust infrastructure to manage the surge in data volumes. Companies may use 2.5D and 3D packaging to develop high-performance processors and network equipment, meeting the industry's escalating requirements.
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China Expected to Witness Significant Growth
- Advancing technologies have contributed to the advancement and miniaturization of various consumer electronics, medical devices, telecom and communication devices, and automobiles by using compactly designed semiconductor chips, which would fuel the demand for the market in China.
- With the launch of 5G services in the country, smartphone demand has been increasing in China, which is likely to fuel the market's growth during the forecast period. The growth of connected devices, 5G-enabled smartphones, and the country's large manufacturing capabilities in the production of consumer electronic products are fueling the market's growth.
- According to MIIT, China's 5G infrastructure surged, boasting 3.38 million base stations by the close of 2023. Bolstered by substantial investments and aggressive deployment strategies, the nation achieved broad 5G coverage. Projections indicated a climb to over six million base stations by 2024. The rising execution of 5G in the region is also anticipated to boost the need for 5G-enabled devices, thereby increasing the demand for 2.5D and 3D semiconductor packaging in China.
- The growth of governmental investments and private players' product development to increase the efficiency of semiconductor components and support the increasing demand for energy-efficient electronic devices would support the market's growth.
- For instance, in August 2023, the National Natural Science Foundation of China (NSFC), a primary domestic funding source for basic research and frontier exploration, launched a new program to finance dozens of projects focused on chiplet technology. This would support the advancement in semiconductor packing and create an opportunity for market vendors operating in the country's 2.5D and 3D semiconductor packaging market.
- The Chinese market's large manufacturing capabilities, the existing industrial infrastructure, and the priority of the country's manufacturing of semiconductor devices would support the market's growth.
- For instance, in May 2024, China set up its third and largest state-backed semiconductor investment fund, worth USD 47.5 billion, as the country redoubled its efforts to build its domestic chip industry, which would support the demand for the 2.5D and 3D semiconductor packaging in the country due to its application in providing a protective enclosure for semiconductor devices.
- Therefore, the growth of governmental initiatives to strengthen the country's semiconductor ecosystem and the country's emergence as a global producer of the automotive and consumer electronic sectors would support the market's growth.
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