Productivity Transfer Propels Further Growth of China Packaging Industry


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Productivity Transfer Propels Further Growth of China Packaging Industry

By Bin Chou, market research analyst, SEMI Shanghai China

There has been strong growth of China’s semiconductor assembly industry over the past several years as foreign semiconductor companies increase their manufacturing presence in China. This trend will continue as the intense pressure to reduce costs drives advanced packaging production to China. Also spurring the growth in packaging in China is the proliferation of semiconductor wafer fabrication and the huge and rapid growth in the domestic electronics end market, especially for mobile phones, personal computers, and other consumer electronics. Though impacted by the global economic crisis, China continues to play an increasingly important role in the semiconductor packaging industry.

Key Assembly and Test Plant Locations in China

Source: SEMI Industry Research and Statistics, January 2010

The rapid development of the IC industry in recent years has led to the continuous advancement of packaging technologies and has increased requirements for packaging materials and thus has driven the development of China's packaging materials technology and market. The packaging materials revenue CAGR from 2004 to 2009 was 15% for China. The China packaging material market is forecasted to reach US$ 3.1 billion in 2011. This represents a 2004 to 2011 compound annual growth rate of 20%, with laminate substrates driving growth. High-end packaging materials are still primarily imported but domestic manufacturing has grown in sophistication over the past few years. China-headquartered companies have also supplied to other packaging materials segments including bonding wire, molding compound, leadframes, and other materials. Some of the key China suppliers include: Beijing Doublink Solder, Beijing Kehua New Chemical Technology, Ningbo Dongsheng IC, Ningbo Hualong Electronics, Ningbo Kangqiang, Shenzhen Earlysun Technology (Esun), Sinyang Semiconductor New Materials and Xiamen Yonghong Electronics.

China Packaging Materials Market by Segment

Source: SEMI Industry Research and Statistics, January 2010

With the fast growth of the assembly market in China, some leading assembly equipment suppliers have moved manufacturing to China. Domestic assembly equipment suppliers accounted for 13% of total China assembly equipment market in 2008. The main target for local equipment suppliers is currently the low-end market.

China Manufactured Assembly Equipment Market

Source: SEMI Industry Research and Statistics, January 2010

The information and data in this article is based on a recently released fee based report called the China Semiconductor Packaging Market Outlook. This report provides an outlook of the semiconductor packaging industry in China as well as a summary of the packaging materials and equipment for this important market. The report also highlights the material and equipment supply chain in China, including which domestic companies supplying materials and equipment are emerging in the market place.

For additional information on this new report, please visit the following link http://www.semi.org/en/Store/MarketInformation/Photovoltaics/ctr_034164.

February 2, 2010