Growing Packaging Materials Market under Pressure


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Growing Packaging Materials Market under Pressure

Cost Reduction Pressures Impact the Market

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

While the semiconductor packaging materials market will contract in 2009, a recovery in unit shipments and materials consumption occurred in the second quarter of the year and looks to continue through the fourth quarter. As a result, plastic packaging materials (including thermal interface materials) will be an estimated $15.8 billion, down 8% from the $17.2 billion reported in 2008. This market is forecast to reach $17.6 billion in 2010 and grow to $20.1 billion by 2013 as material consumption is projected to increase. Steady unit growth is expected through 2011 for key segments of the packaging materials market.

Packaging Material Segment

 

2008

2009

2010

2011

Organic Substrates (K square meters)

7,574

6,573

7,055

7,479

Leadframes (B units)

331

300

343

365

Mold Compound (M kilograms)

158

137

161

171

Bonding Wire (B meters)

15.8

15.4

18.5

20.3

Going forward, semiconductor packaging growth areas include flip chip, wafer-level packaging (WLP), ball grid array (BGA), leadframe-based chipscale packaging (CSP), stacked die packages, and system-in-package (SiP)/multichip packages. More traditional packaging technologies will see demand continue to increase for some applications, though stagnant in others and, for some basic form factors, to continue to decline.

Improvements in existing materials and the development of new materials are critical in advancing packaging technologies. Here are some observations for specific segments:

    1. Organic Substrates

    For the organic substrate materials, flip chip applications have grown dramatically. The drivers for flip chip PBGAs continue to be electrical performance, on-chip power distribution, and pad limited designs. Form factor and performance are driving the shift from wire bond to flip chip for processors and other devices used in wireless applications. Over the next several years, substrate prices are expected to decline as a result of increased supply and improved material utilization and yield.

    2. Leadframes

    On-going technological enhancements in leadframe manufacturing focus on plating and surface treatment technologies in an effort to achieve desired moisture sensitivity specifications for packages. Suppliers continue to report the evaluation of new materials to lower costs in light of rising copper prices. Part of this is assessing and using leadframe alloys supplied by China-based companies.

    3. Mold Compounds

    Input from device makers and packaging subcontractors highlight compatibility with low-k dielectric devices, fine and high-density pitch wire, as well as copper bonding wire as important areas for on-going materials development for mold compounds. Materials are needed to reduce warpage in thin and stacked packages. Improved mold compounds are required for thin gap filling for conventional transfer mold technology, including over-molded underfill applications.

    4. Bonding Wire

    Wire suppliers continue to develop new wire alloys and control metal microstructures with properties to meet the various, yet demanding requirements in processing and packaging reliability for differing packaging designs and form factors. Of concern to suppliers and their customers is the rising price of gold metal. As a result, the migration to smaller diameter wire has been noticeable with almost 70% of the wire shipped less than 25 micron in diameter. Use of copper wire is increasing and it now represents over 5 percent of the total wire market.

Clearly entwined with the trends and drivers for new materials development are the industry-wide pressures to reduce the cost of electronics and semiconductor packages. All segments of the packaging materials market are under pressure to develop lower cost solutions. Companies across the supply chain will need to collaborate to balance the needs of new materials development and cost reduction efforts.

All of the information 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.

December 1, 2009