Market Size and Development Trends of Advanced Semiconductor Packaging and Testing

Definition of Advanced Packaging

Advanced packaging refers to a packaging solution that achieves process complexity through innovative structural design, interconnection technology, materials, and equipment. It enables higher integration, better performance, smaller size, lower power consumption, and higher reliability for semiconductors. As Moore’s Law slows down, advanced packaging has become not only a key post-fabrication process in semiconductor manufacturing but also a core technology path for continuously improving semiconductor performance and meeting complex downstream application demands.

Classification of Advanced Semiconductor Packaging

Due to differences in electrical performance, size, and application scenarios among semiconductor products, packaging forms are diverse and complex. Based on the presence and type of packaging substrate, semiconductor packages can be divided into substrate-less, organic substrate, and lead-frame substrate types, each with its own technologies.

• WLP (Fan-Out): In fan-out WLP, diced chips are mounted on a temporary carrier and molded to form a reconstituted wafer. Redistribution layers (RDL) extend I/O pads beyond the chip area, allowing for higher I/O density and flexible layouts without using a substrate.
• BGA: Ball Grid Array (BGA) uses a substrate as an interposer. The chip is connected to the substrate via wire bonding or flip-chip bonding, with solder balls on the bottom providing connections to external circuits such as PCBs.
• LGA: Land Grid Array (LGA) also uses a substrate and connects to the chip through wire bonding or flip-chip methods. Metal pads on the bottom provide electrical connection to external circuits.
• FC-QFN: Flip-Chip Quad Flat No-Lead (FC-QFN) uses a metal lead frame as the interconnect medium. The chip is flip-chip mounted on the frame, offering low cost, high reliability, and good thermal performance.
• 2.5D: 2.5D integration uses an interposer (such as TSV, TGV, or organic RDL interposers) to laterally integrate multiple dies. This achieves ultra-dense interconnections and high bandwidth without vertical stacking.
• 3D: 3D packaging stacks multiple dies vertically using TSVs, micro-bumps, and advanced bonding (such as TCB or hybrid bonding), achieving high integration density and short interconnect paths.

Advantages of Advanced Packaging

Traditional packaging focuses on protection, size enlargement, and electrical connection, while advanced packaging enhances functional density, shortens interconnects, and enables system-level integration without relying on lithography advancements.

Global and China Market Size of Advanced Semiconductor Packaging and Testing

Driven by demand from communications, consumer electronics, high-performance computing, and AI, the market for advanced semiconductor packaging and testing has grown rapidly. Supported by technologies such as flip-chip bonding, wafer-level packaging (WLP), and 2.5D/3D packaging, the global market expanded from RMB 214.1 billion in 2020 to RMB 312.4 billion in 2024, with a CAGR of 9.9%.
Over the next five years, with the slowdown of Moore’s Law, advanced packaging and testing will continue to benefit from autonomous driving, data centers, high-performance computing, and wearable devices. By 2025, the global advanced packaging and testing market is expected to surpass traditional packaging for the first time, accounting for over 50% of the total packaging and testing market.
By 2029, the global market size is expected to reach RMB 524.4 billion, with a CAGR of 10.9% from 2024 to 2029. In China, the market grew from RMB 96.7 billion in 2024, up from 2020’s base with a CAGR of 13.3%, and is projected to reach RMB 188.8 billion by 2029 with a CAGR of 14.3%, significantly higher than the global average.

Market Trends in Advanced Semiconductor Packaging and Testing

• Rising position of packaging in the semiconductor value chain: As transistor scaling becomes cost-prohibitive, advanced packaging offers performance enhancement without new lithography nodes. Companies are investing heavily in packaging as a key differentiator.
• Higher performance and miniaturization: With growing demand for smaller, faster electronics, technologies like 2.5D/3D and WLP enable high density and compact size. These are critical for AI chips, data centers, smartphones, and wearables.
• Localization trend: Amid global trade shifts, China’s advanced packaging and testing industry is accelerating domestic production and technology development, supported by government policy, R&D, and capital investment.

Market Drivers

• High-performance memory: Explosive data growth and AI workloads drive packaging upgrades. 3D NAND uses TSVs to increase storage density, while HBM3/HBM3e reduces latency.
• Data centers and HPC: Advanced packaging integrates multiple dies to enhance compute density and reduce latency, enabling efficient heat dissipation and optical interconnects.
• Automotive electronics: Smart driving and V2X demand high reliability and SiP solutions with strong EMC performance.
• Consumer electronics: Devices are becoming thinner and more energy-efficient, driving WLP and heterogeneous integration adoption.
• Industrial electronics: Industrial IoT requires high-compute, stable chips using 2.5D/3D packaging for real-time data processing and durability.