Global Semiconductor Packaging Materials Outlook


Bookmark and Share

Global Semiconductor Packaging Materials Outlook

SEMI and TechSearch International, Inc. have cooperated in the development of the Global Semiconductor Packaging Materials Outlook, a comprehensive market research report on the global semiconductor packaging materials markets. Interviews were conducted with more than 110 semiconductor manufacturers, packaging subcontractors and packaging materials suppliers to gather information for the investigation.

More Package Types and Materials Content

There has been strong adoption of chip scale packaging (CSP), flip chip, stacked die packaging, and wafer-level packaging (WLP) form factors over the past several years. Mobile phones and other portable electronics are big volume drivers for CSP, stacked die packaging, WLP, and, increasingly, package-on-package (PoP). Flip chip package growth is driven by numerous applications: high performance processors, chipsets, and graphic devices to name a few. WLP demand is driven by memory, integrated passive devices (IPD), analog devices, and power devices. No single packaging technology meets all requirements or needs, so the proliferation of package types will continue and material needs will evolve.

Materials content is increasing in advanced packaging with materials being critical in solving the performance and reliability requirements expected of packaging. Customer or application-specific material formulations by suppliers have increased to meet various requirements performance and process requirements. Some consolidation is occurring amongst the material supplier base; however, new entrants are also appearing in the market, especially companies in China.

Advanced Packaging Technologies

Given pressures to reduce costs, some of the advanced packaging technologies are becoming increasingly competitive to traditional packaging solutions. Quad Flat-pack No-lead (QFN), wirebond ball grid array (BGA), and CSP are generally considered commodity items, with manufacturers focusing development efforts to reduce costs. Counter to the consumer-driven cost reduction pressures, rising raw material costs are a major challenge to material suppliers and their customers. Specific to the packaging materials markets are rising costs of important metals: copper, tin, gold, silver, and palladium. There has been a sharp rise in pricing for these metals over the past several years, and this has spurred development efforts to reduce the amount of metal consumed or, in some cases, to find replacements for some of these materials.

Packaging Materials Opportunity Areas

Advanced packaging applications are key growth drivers in the packaging materials market. Some of the highlighted opportunity areas in semiconductor packaging materials include:

  • Reduced cost structures for standard laminate products, including larger panel sizes for standard PBGA/CSP products and reduced cycle times.
  • Thinner core substrates for small vias, finer lines and spaces, lower dielectric constant build-up layers and other requirements.
  • Thin core materials with suitable properties to reduce warpage effects and improve handling.
  • Leadframe surface treatments and plating process technologies to enhance packaging reliability and etching processes to produce thin leadframe substrates.
  • Alloy development to support on-going migration to smaller diameter gold bonding wire.
  • Die attach materials and processes compatible with ultrathin wafer technologies.
  • Die attach, liquid encapsulants, substrates, underfills, and green mold compounds that do not degrade moisture sensitivity levels, have a low coefficient of thermal expansion (CTE), and are compatible with low-k dielectrics and lead-free processing at a competitive price.
  • Underfill solutions are needed for fine bump pitch and large die.
  • Lead-free solder ball supply with comparable pricing to non-lead free offerings (getting closer, but a price difference remains).
  • Integrating WLP dielectrics into larger die size applications.
  • Interest in new materials including phase-change and new thermal greases, but continued use of indium-based solder in some high performance applications despite price volatility for indium.

In the near-term, as device manufacturers transition to 45 nm process technologies, several key challenges remain with materials compatibility with copper/low-k interconnects, planarity/warpage control, and CTE mismatch between large dies and substrates.

Regional Trends Over Five Years

Several regional trends are apparent in examining the packaging materials market data over the past five years. One is the continued growth and investment in packaging assembly and materials manufacturing in China. Investments by overseas headquartered material suppliers continue as the number of assembly plants in China grow. IC package substrate production has transitioned from Japan to the Taiwan region and will slowly expand into China. Finally, there is an observable trend showing Korean-headquartered material suppliers increasing the percentage of their sales outside of Korea. Combined overseas sales reported by seven Korean material suppliers represent about 60% of the total sales (an estimated $930 million) in 2007.

Packaging Materials Revenue

In total, the semiconductor packaging materials covered in this investigation are forecasted to grow from $15,217 million in 2007 on a global basis to $19,708 million in 2011, excluding thermal interface materials. This represents a compound annual growth rate of 6.8 percent, with laminate substrates driving growth. Subtracting out laminate substrate market growth the CAGR is reduced to 4.8%. Thermal interface materials will add another $303 million and $491 million in 2007 and 2011, respectively, to the packaging materials market. The global market for laminate substrates for IC packages is forecasted to experience a compound annual growth rate (CAGR) of 13.3% from 2006 through 2011 on a unit basis. With expansion of the use, laminate substrate pricing is decreasing; however, finer design and green requirements could push up the cost.

In revenues, the laminate substrate market is now almost double the size of the leadframe market. Bonding wire revenues will likely increase by 20% in 2007, though higher gold metal pricing is a significant factor in this growth. Assuming flat gold prices in 2007, bonding wire market revenues have grown by 11% to 13%. Higher gold pricing has contributed to the interest and on-going development in copper bonding wire and in the transition towards smaller diameter gold wire. It is estimated that a majority of the gold wire sold in 2007 will be of a diameter less than 25 microns. On a volume basis, the copper wire market is estimated to grow by 81% in 2007.

Mold compound revenue growth has been limited by the sharp decline in average selling prices for green materials. The ASP declined was observed in 2006. The steep decline in average selling price has been attributed to increased competition for market share with these materials. The transition to green packaging, which required packaged re-qualifications, opened an opportunity for suppliers to gain market share from end customers. The total underfill market will grow to $138 million in 2007 and will grow at a CAGR of about 17% through 2011. Applications for CSP and WLP are key growth drivers for the underfill market. Die attach materials market will reach $562 million this year and is forecasted to grow to $755 million by 2011. By revenue, the tape (film) die attach portion for stacked die packaging will at a CAGR of over 9% during the forecast period.

Revenue growth in the semiconductor packaging materials market correlates to overall expectation for semiconductor unit growth. Unit volume growth varies for each materials market, with price increases for certain segments and continued declines in others. The estimated 2007 global market size and key trends in each semiconductor packaging materials segment are summarized below.

Semiconductor Packaging Materials Segment

Estimated

2007 Global Market Size

$M

Comments

Laminate Substrates

$6,196

The substrate shortage experience in 2005 has been replaced by an oversupply of capacity for 2-2-2 structures. Suppliers continue to shift their business focus to laminate CSP substrates where margins make investment more profitable.

Trends in flip chip build-up substrate design include stacked vias and vias over printed through-holes in the core. Low CTE, low Z-axis expansion, and low dielectric constant materials.

Flex Circuit/Tape Substrates

$263

TBGA is expensive compared to laminate technology. Volumes remain for tape CSP though many companies have converted to rigid laminate CSP.

Leadframes

$3,118

Continued strong growth in QFN family. Investments and new manufacturing capacity in China. Basis for competition is the lowest price and shortest turn around time.

Bonding Wire

$3,178

Market growth in revenues driven by soaring gold prices. Migration to smaller diameter gold wire continues, with <25 micron diameter wire representing over 50% of wire shipments. Total meters of copper wire sold increased by 81%.

Mold Compounds

$1,371

Continued adoption of green compounds and “niche” formulations to meet device/package specific designs. Aggregate average selling prices have declined, especially for green materials. Manufacturing capacity increasing in China to include production of green materials.

Underfill Materials

$138

Remains a bottleneck in flip chip manufacturing. Numerous suppliers in the market. Special formulations developed for compatibility with low-k dielectrics.

Liquid Encapsulants

$117

Low moisture absorption and formulations compatible with trend towards smaller diameter wire.

Die Attach Materials

$562

Strong growth in tape attach continues for stacked die packaging applications. Number of suppliers introducing dicing die attach tape technology. Companies developing processes to coat paste on the backside of the wafer.

Solder Balls

$265

Shipments of lead-free solder balls continue to increase. Estimated that 80% of shipments are lead-free. Numerous suppliers.

Wafer Level Package Dielectrics

$9.8

DRAM adoption currently limited.

Thermal Interface Materials

$303

Continued use of indium-based solders for some high performance. New introductions of thermal grease anticipated. Increased interest in using phase change materials.

For more information, visit http://www.semi.org/en/node/45446

Source: SEMI Industry Research and Statistics and TechSearch International, 2007