Japanese Companies Continue to Dominate the Packaging Materials Market

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Japanese Companies Continue to Dominate the Packaging Materials Market

Suppliers in Korea Expanding their Markets, China-based Suppliers Are Emerging

By Jan Vardaman, TechSearch International, and Dan Tracy, SEMI

Companies headquartered in Japan dominate the global semiconductor materials market. This is especially true in the packaging materials segment of the industry where Japan-based companies are the top suppliers for most of the key materials consumed in semiconductor packaging.

Top Suppliers in Each Segment (Headquarter region)

Organic Substrates

Bonding Wire


Mold Compounds

Die Attach

Ibiden (Japan)

Shinko (Japan)

Nanya PCB (Taiwan)

Tanaka (Japan)

Heraeus (Germany)

Sumitomo Metal Mining (Japan)

Nippon Micrometal (Japan)

Sumitomo Metal Mining (Japan)

Mitsui High-Tec (Japan)

Hitachi Cable (Japan)

Shinko (Japan)

Sumitomo Bakelite (Japan)

Hitachi Chemical (Japan)

Nitto Denko (Japan)

Kyocera Chemical (Japan)

Henkel (Germany)

Hitachi Chemical (Japan)

Lintec (Japan)

Sumitomo Bakelite (Japan)

Out of the estimated $15.8 billion plastic packaging materials market (including thermal interface materials) in 2009, the combined market share of Japan headquartered suppliers is estimated to be about 65%. Japanese suppliers have production facilities throughout Asia to support their customers, and have also steadily invested in production capacity in China over the past decade.

While Japanese companies dominate the market, suppliers in other regions continue to look to make inroads in the packaging materials market.

Korean headquartered materials suppliers have been increasing the percentage of sales obtained overseas versus domestic sales. Based on regional sales data from seven material suppliers (five leadframe suppliers and two bonding wire suppliers) over the past seven years, the collective sales of these companies outside of Korea are growing. These seven companies, combined, had just under a half-billion dollars in total packaging material sales in 2003 and this is expected be about US$ 900 million in 2009. Export sales are estimated to reach 60% of the total sales for these companies in 2009, up from the 40% reported in 2003. Sales into Taiwan and China represent over 40% of the combined sales for these seven suppliers compared to 20% of sales in 2003.

Combined Total Sales and Percentage Export for

Seven Korean Packaging Material Suppliers








2009 E

Combined Revenues (US$ million)








% Export Sales








Key Korean companies supplying packaging materials include MK Electron and Heesung Metal for bonding wire; Samsung Techwin, Poongsan Precision, and LG Innotek (formerly LG Micron) for leadframes; MK Electron and Duksan Hi-Metal for solder balls; and Cheil Industries and KCC Corp. for molding compounds. MK Electron also supplies solder balls. The emergence of new packaging form factors, such as stacked die packaging, have attracted the attention of the Korea based suppliers, and Cheil Industries, LG Chemicals, and LS Mtron have entered the growing die attach film market.

China-headquartered companies also supply to many packaging materials segments including bonding wire, molding compound, leadframes, and other materials. Some of the China suppliers include:


Material Segment

Beijing Doublink Solder

Gold and Copper Bonding Wire, Solder Balls

Beijing Kehua New Chemical Technology

Molding Compound, Die Attach Paste

Guangdong Rongtai

Molding Compound

Ningbo Dongsheng IC

Etched Leadframes

Ningbo Hualong Electronics

Stamped Leadframes

Ningbo Kangqing

Gold and Copper Bonding Wire; Stamped and Etched Leadframes

Shanghai Dongsheng

Etched Leadframes

Shenzhen Early Sun Technology

Solder Balls

Sinyang Semiconductor New Materials

Plating and Other Chemicals

Xiamen Yonghong Electronics

Stamped Leadframes

These companies tend to supply materials for more traditional packaging technologies with lower lead counts, though some suppliers are expanding their technical capabilities and are also seeking to export materials to customers outside of China. Revenues for China-headquartered suppliers are estimated to be in the range of US$ 300 million for 2009.

Emerging packaging form factors, changes in materials requirements (e.g. RoHS restrictions), and cost reduction efforts will open up opportunities for new suppliers. For Japanese-based suppliers, exchange rates and higher production costs in Japan make materials more expensive, opening opportunities for other suppliers to low-end applications. Japanese companies continue to have an advantage in high-end materials given past and on-going R&D efforts and know-how, which will keep Japanese companies in the higher margin materials.

Content in this article was derived from a recently completed market research study, Global Semiconductor Packaging Materials Outlook—2009-2010 Edition, produced by SEMI and TechSearch International. In developing this report, over 140 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—2009-2010 Edition, please contact Dr. Dan P. Tracy, research development director, Industry Research and Statistics, SEMI via email at dtracy@semi.org, or telephone 1.408.943.7987 or facsimile 1.408.943.7915. You can also click here for sample, pricing, and ordering information.

January 5, 2010