Advanced Packaging market has 10.6% CAGR to hit $79bn in 2028

By contrast, the traditional packaging market is projected to have a slower 3.2% CAGR from 2022 to 2028, with a $57.5 billion market value in 2028.

Overall, the packaging market is forecasted to grow at a CAGR of 6.9% to $136 billion in 2028.

The AP market accounted for approximately 47% of the total IC packaging market in 2022. Its share is steadily increasing due to various megatrends. 

Within the AP market, the Flip-Chip platform, which includes FCBGA ((Flip-Chip BGA) and FCCSP (Flip-Chip Chip Scale Package) , held a 51% market share in 2022. 

The segments expected to have the highest revenue CAGR from 2022 to 2028 are ED (Embedded Die) 2.5D/3D, and flip-chip, with growth rates of 30%, 19%, and 8.5%, respectively.

“Mobile & consumer represented 70% of the total AP market in 2022,” says Yole’s Bilal Hachemi, “this segment is projected to have a 7% CAGR from 2022 to 2028, constituting 61% of the AP revenue by 2028. The telecom & infrastructure segment is the fastest growing, with an estimated revenue growth rate of around 17%. Automotive & transportation will make up 9% of the market, while other segments like medical, industrial, and aerospace/defense will account for 3%.”

The AP wafer’s market share is anticipated to grow from approximately 29% in 2022 to 37% in 2028. 

In terms of units, traditional packaging holds over 94% of the market share, but AP shipments are expected to grow at a CAGR of about 6% from 2022 to 2028 (in volume).

Seven players dominate AP, with OSATs accounting for 65.1% of AP wafers.

 OSATs expand testing expertise, while traditional test players invest in packaging. 

The industry sees a paradigm shift as players from different models enter packaging, cannibalizing OSATs’ business.

 Substrate supply has been tight, impacting material availability and leading to extended delivery lead times and price increases. 

Decreased demand and capacity expansions may help ease the shortage.

Substrate suppliers invest in capacity expansion but face time constraints, resulting in ongoing supply issues for the next 2 to 3 years