Packaging Materials: Regional Markets
by Dan Tracy and Jan Vardaman
2005 proved to be a solid growth year for the semiconductor plastic packaging materials market. The strong and steady recovery in semiconductor units resulted in 13.4% revenue growth in the worldwide plastic packaging materials markets (excludes ceramic packaging). The strong year over year growth was driven by the on-going ramp in plastic laminate substrate packaging for ball grid array (BGA), flip chip and chip scale packaging (CSP). The transition to “green” packaging has created strong demand for new resin formulations, thus contributing to growth in the mold compound market.
Looking ahead in 2006, strong growth is expected given the on-going demand for advanced packaging, with the worldwide plastic materials market forecasted to reach $13.40 billion. The regions of China, Korea, Southeast Asia and Taiwan are all forecasted to experience double-digit revenue growth. The other regions tracked experience single-digit revenue growth. For Korea, Southeast Asia and Taiwan, the continued ramp in BGA, flip chip and CSP will lead this growth. New memory packaging technologies will be a key driver for materials consumption in Korea, while the ever growing packaging subcontractor market will result lead growth in Southeast Asia and Taiwan.
Regional Plastic Packaging Material Markets
(Excludes Ceramic Packaging)
The plastic materials market in Japan is forecasted to grow 9% in 2006 with, similar to Korea and Taiwan, advanced packaging applications driving the growth. The organic substrate consumption in Japan will increase to $1.15 billion in 2006 compared to the $909 million reported for 2005. In other material segments, consumption in Japan is forecasted to remain flat or, in the case of leadframes, to decline. It is estimated that 2006 leadframe sales into Japan will decline to $542 million from the $602 million observed in 2005. Leadframe sales in Japan were $649 million in 2004, so this materials market has been in decline for a couple of years. Japan headquartered semiconductor manufacturers have increased their assembly and packaging base for more traditional packages to overseas facilities. The focus of on-shore manufacturing is on advanced packages, e.g. stacked packaging, multichip packaging, etc.
Many Japanese semiconductor manufacturers now have plants in China fulfilling the needs in assembling traditional packages. Indeed, numerous overseas integrated device manufacturers (IDM) and packaging subcontractors from all around the world have made significant investments in China (see map) as they seek to be closer to the end electronic system manufacturing base in China and to reduce manufacturing costs for traditional package technologies. Currently, low to mid pin-count leadframe packages represent the mainstream package technology in China. Advanced packaging technology offerings are moving forward, with BGA, CSP and fine pitch quad flat pack (QFP) packages increasingly manufactured in China. Lead-free or “green” packaging will also become important in China as dictated by worldwide trends.
IDM and Packaging Subcontractor Plants in China
Double-digit revenue growth is forecasted in 2006 for the plastic packaging materials markets. China, Korea, Southeast Asia and Taiwan will experience the strongest growth rates: China because of the growing overseas investment in assembly and packaging manufacturing, while Korea, Southeast Asia and Taiwan will grow with the ramp in BGA, flip chip and CSP package assembly.
All of the information in this article was derived from a recently completed market research study, Global Semiconductor Packaging Materials Outlook, produced by Semiconductor Equipment Materials International (SEMI) and TechSearch International. In developing this report, over 125 in-depth interviews were conducted with semiconductor manufacturers, packaging subcontractors and packaging materials suppliers throughout the world.
TO ORDER YOUR COPY of Global Semiconductor Packaging Materials Outlook, please contact Dr. Dan P. Tracy, research development director, Industry Research and Statistics, SEMI via email at firstname.lastname@example.org, or telephone 1.408.943.7987 or facsimile 1.408.943.7915. You can also visit www.semi.org and select STORE from the horizontal menu to find Global Semiconductor Packaging Materials Outlook.