2017 Outlook: Trends in Advanced Packaging and China’s Role

January 18,2017

This outlook was prepared for Semiconductor Manufacturing China in response to a request to provide an industry forecast for 2017, one of many that Dow business leaders participated in this year looking at different aspects of the electronic materials landscape. Kavanagh’s outlook takes a retrospective look at how 2016 projections for advanced packaging came to fruition, particularly in fan-out wafer-level packaging (FOWLP), and what has happened in the industry to impact China’s expanding role in the advanced packaging segment of semiconductor manufacturing going forward in 2017.

We often rely on hindsight, so as we look ahead at the advanced packaging sector of the semiconductor industry for 2017, reflecting on what happened in 2016 offers a good place to start.

Many of last year’s projections played out as expected. TSMC ramped its integrated fan-out package-on-package (InFO PoP) into volume production and got significant traction in smartphone applications. This has caused disruption in the market, as device manufacturers have increasingly become involved in packaging and in some cases beginning to take the lead. This deeper involvement has put pressure on outsourced semiconductor and test service providers (OSATs), which has driven consolidation in this space, such as the acquisition of STATS ChipPAC by JCET and – at the time of writing this – the anticipated merger of ASE and SPIL. Concurrently, OSATs are positioning themselves in China in response to government investment in the advanced packaging sector.

The impact fan-out wafer-level packaging (FOWLP) technology is having on substrate manufacturers is another factor that will influence China’s role in packaging next year. As substrates are used less frequently because of the reconstituted wafer process for FOWLP, substrate manufacturers have started to experience volume declines. In response, these manufacturers are looking to support panel as a natural progression from substrates. Further, they are expanding into the redistribution layer processes and attaching die. If panel FOWLP development and ramp up is successful, this could provide an opportunity for China’s circuit board business, particularly in devices for the internet of things market. High-performance chips are not typically utilized, which could enable a relatively easier entry into the advanced packaging segment for these suppliers.

With an established business and technology base in the region in Taiwan, Korea and Japan, Dow Electronic Materials is well-positioned to support this growth in China, with material sets targeted toward FOWLP and other advanced packaging technologies. We look forward to a promising 2017.

See related article:

2017 Outlook: Fan-out Wafer Level Packaging Goes Mainstream

We often rely on hindsight, so as we look ahead at the advanced packaging sector of the semiconductor industry for 2017, reflecting on what happened in 2016 offers a good place to start.

Many of last year’s projections played out as expected. TSMC ramped its integrated fan-out package-on-package (InFO PoP) into volume production and got significant traction in smartphone applications. This has caused disruption in the market, as device manufacturers have increasingly become involved in packaging and in some cases beginning to take the lead. This deeper involvement has put pressure on outsourced semiconductor and test service providers (OSATs), which has driven consolidation in this space, such as the acquisition of STATS ChipPAC by JCET and – at the time of writing this – the anticipated merger of ASE and SPIL. Concurrently, OSATs are positioning themselves in China in response to government investment in the advanced packaging sector.

The impact fan-out wafer-level packaging (FOWLP) technology is having on substrate manufacturers is another factor that will influence China’s role in packaging next year. As substrates are used less frequently because of the reconstituted wafer process for FOWLP, substrate manufacturers have started to experience volume declines. In response, these manufacturers are looking to support panel as a natural progression from substrates. Further, they are expanding into the redistribution layer processes and attaching die. If panel FOWLP development and ramp up is successful, this could provide an opportunity for China’s circuit board business, particularly in devices for the internet of things market. High-performance chips are not typically utilized, which could enable a relatively easier entry into the advanced packaging segment for these suppliers.

With an established business and technology base in the region in Taiwan, Korea and Japan, Dow Electronic Materials is well-positioned to support this growth in China, with material sets targeted toward FOWLP and other advanced packaging technologies. We look forward to a promising 2017.

See related article:

2017 Outlook: Fan-out Wafer Level Packaging Goes Mainstream