Advanced Packaging Market

Advanced Packaging Market Size

The global advanced packaging market was valued at USD 38.5 billion in 2024 and is estimated to grow at a CAGR of 11.5% to reach USD 111.4 billion by 2034. The growth of the market is attributed to factors such as increasing increased miniaturization of electronic components and increasing adoption of artificial intelligence.

The advanced packaging market is witnessing a surge in demand due to the increasing miniaturization of electronic devices used in consumer electronics, automotive, and industrial sectors. Miniaturization has enabled application of electronics in vast fields such as medical devices, automotive, space applications, industrial automation among others. In mobility sector, the growing demand for lightweight, emission-free vehicles have propelled the demand for automotive electronics. Miniaturization provides the solution, as it allows for smaller, more intelligent electronic components and circuits in the vehicle.

The increased trend towards miniaturization is driving the growth of advanced packaging such as 3D packaging, system-on-chip packaging etc. 3D packaging enables miniaturization by stacking layers of circuits on top of each other, greatly minimizing the area occupied by components on a PCB. This approach not only saves space but also shortens the distance electrical signals travel, resulting in faster device performance.

To address the growing demand for advanced packaging, leading foundry companies are increasingly investing in setting up new factories. For instance, in August 2024, TSMC acquired Innolux’s Tainan 4 fab for production of Chip-on-wafer-on-substrate (CoWoS). Further, in October 2024, TSMC decided to acquire another old Innolux factory in Nanke to address the growing demand for CoWoS for AI.

The growing adoption of AI in various industries is also supporting the growth of advanced packaging. The continued growth of AI application in self-driving cars to advanced data analytics has significantly increased the demand for computing power and memory. The conventional chip design process are facing tough limitations to meet the AI’s high speed data transfer and low latency demands. Advanced packaging solutions can integrate multiple chips into single package, enhancing performance. Advanced packaging technologies, such as 2.5D and 3D integration, allow for the stacking of memory and logic chips, significantly reducing the distance data must travel. This proximity improves communication speed and energy efficiency. These advanced packaging solutions are essential innovations to deliver the HBM required for AI workloads.

Key companies in advanced packaging should invest in glass core substrate for facilitating 3D advanced packaging of increasingly complex chips for AI, HPC, 5G/6G networking applications demanding higher transistor densities, lower power consumption, and faster data transfer rates.

Advanced Packaging Market Trends

• The shift towards 3D IC and chiplet-based architecture is one of the significant trend in the advanced packaging By vertically stacking dies or combining smaller, modular chiplets, manufacturers can optimize space and improve overall performance. Chiplets offer the advantage of modularity, allowing designers to reuse proven blocks and mix-and-match components tailored for specific applications. This not only reduces development costs but also accelerates time-to-market.
  
• Managing heat becomes high priority for manufacturers to keep the thermal expansion under check. Advanced packaging methods such as embedded cooling technologies and optimized thermal interfaces help ensuring reliability and longevity for high-performance devices. Techniques like integrating microfluidic cooling channels directly into the package and advanced thermal interface materials are increasingly used to mitigate heat-related performance issues.
  

Advanced Packaging Market Analysis

Based on the packaging type, the market is segmented into flip-chip, fan-in Wafer Level Packaging (WLP), embedded-die, fan-out, and 2.5D/3D.

• Flip-chip based advanced packaging segment accounted for USD 24 billion in 2023. Flip-chip-based packaging supports ADAS, infotainment, and vehicle electrification in modern cars. In this packaging type chip is flipped and connected directly to the substrate using solder bumps, which reduces signal path length and resistance. It is primarily used for high-density interconnections such as mobile devices and automotive electronics.
  
• Fan-in Wafer Level Packaging (WLP) advanced packaging segment accounted for USD 3.1 billion in 2022. In fan-in Wafer Level Packaging (WLP) packaging directly integrated at the wafer level, which eliminates the need for a separate package substrate. The entire packaging process is done at the wafer level therefore it reduces manufacturing steps and costs compared to traditional packaging. Fan-in WLP is widely used in compact, cost-sensitive applications such as accelerometers, gyroscopes, pressure sensors. Although it has limitation of lower I/O density as compared to fan-out and flip-chip technologies.
  
• Embedded die advanced packaging segment accounted for USD 598.9 million in 2021. In the embedded die advanced packaging, semiconductor chip is embedded within the organic, PCB, or silicon substrate rather than being mounted on top, which leads to a compact and robust structure.  This type is primarily used for ultra-thin and miniaturized electronic designs. Its usage reduce the package thickness and overall footprint.
  
• Fan-out advanced packaging segment accounted for USD 4.3 billion in 2023. Fan-out technology allows for increased input/output (I/O) density by redistributing interconnects beyond the original die footprint, unlike Fan-in WLP, which is restricted to the die size. Unlike traditional flip-chip or 2.5D packaging, Fan-Out does not require an interposer or substrate, reducing overall package size, complexity, and cost.
  
• 2.5D/3D based advanced packaging segment accounted for USD 2.6 billion in 2022. In 2.5D/3D advanced packaging type integration of logic, memory, FPGA, and GPU chiplets is done within a single package, to improve system performance and functionality. Heat is efficiently distributed across the interposer, making it suitable for high-power applications such as AI and High Performing Computer (HPC).
  

Based on applications, the advanced packaging market is divided into consumer electronics, automotive, industrial, healthcare, aerospace & defense, and others.

• Consumer electronics segment is expected to account for 73.4% of the global market in 2024 owing to rising usage of 2.5D and 3D packaging technique, which allows ICs compact packaging device designs, this enables slimmer smartphones, smartwatches, and AR/VR headsets.
  
• Automotive segment is expected to account for 11.1% of the global advanced packaging industry in 2024. Fan-out wafer-level packaging (FOWLP) and 3D ICs advanced packaging techniques improve power efficiency and signal integrity in automotive Electronic Control Unit (ECUs), Advanced Driver Assistance System (ADAS), and infotainment systems. Improvement in AI computation for LiDAR, radar, and vision processing units, enables real-time decision-making in autonomous vehicles through heterogeneous integration and chiplet-based packaging.
  
• The industrial application segment is expected to account for 4.7% of the global market in 2023 owing to the rising industrial automation. In industrial automation, advanced packaging provides the integration of sensors, actuators, and control systems into compact, reliable packaging. System-in-Package (SiP) advanced packaging solution helps in miniaturization of components without compromising functionality, enabling the development of smaller, smarter robots for factory automation.
  
• Healthcare segment is expected to account for 4.2% of the global advanced packaging market in 2022. Pacemakers and neurostimulators are important implantable devices in the healthcare industry. Advanced packaging techniques such as hermetically sealed packages protect sensitive electronics from bodily fluids, corrosion, and environmental stress, improves these devices lifespan. Also, advanced packaging offers the integration of microfluidic systems, sensors, and biochips in point-of-care diagnostic devices, such as portable glucose meters and DNA analyzers. These important functions in healthcare applications driving the segments growth.
  
• The aerospace & defense segment is expected to account for 1.7% of the global market in 2021. Aerospace and defense industry require systems that can withstand harsh and extreme conditions, including high radiation, extreme temperatures, and mechanical stress. Hermetic sealing advanced packaging and ruggedized packaging solutions, ensures components in spacecraft, satellites, and military equipment remain operational in such environments.
  

In 2024, North America accounted for the largest share of 29% of the global advanced packaging market. The large share of this market is attributed to the government in the region.

• In 2024, the U.S. market accounted for USD 10.2 billion. United States advanced packaging industry is likely to be driven by the growing governments emphasis on the country’s leadership in advanced packaging. For instance, in February 2024, U.S. government announced National Advanced Packaging Manufacturing Program and offering funding of USD 1.4 billion for boosting technological advancement in advance packaging in U.S.
  
• The Canada advanced packaging market is expected to reach USD 1.7 billion by 2034. In March 2023, U.S. and Canada entered partnership to strengthen advanced packaging and PCB manufacturing. Also, U.S. government announced Defense Production Act funding of USD 50 million to companies working in advanced packaging area in U.S. and Canada. This collaboration is crucial for boosting Canada’s role in the Canada market.
  

In 2024, Europe accounted for a share of 19.4% of the global advanced packaging market. Factors supporting growth of advanced packaging in Europe are key market players strategy and government and organizations support.

• The Germany advanced packaging industry is expected to reach USD 2.6 billion by 2024. The growth of advanced packaging in Germany is attributed to the growing interest and focus of companies in Germany. For instance, in February 2025, ERS electronic GmbH announced the geographical expansion by opening production and R&D facility at Barbing, Germany. The center is focusing on wafer/panel debonding, warpage handling, and thermal management, supporting European customers with hands-on testing and innovation. Companies such as ERS's will boost the Germany's role in the market.
  
• The UK advanced packaging market is expected to grow at a CAGR of 9.6% during the forecast period. In May 2023, UK government published UK national semiconductor strategy, which fosters collaboration, drives innovation, and supports supply chains, boosting the development of advanced packaging technologies.
  
• France advanced packaging industry is expected to grow at a CAGR of 9% from 2025 to 2034. French consumers are showing strong preference for electronic devices such as smartphones, tablets, and smart home appliances, which requires advanced packaging. Additionally, there is a growing trend towards the adoption of emerging advanced packaging technologies such as 2.5D/3D will further drives the demand for semiconductors in France.
  
• Italy advanced packaging market is expected to reach USD 2 billion by 2034. In December 2024, the European Commission announced its approval granting funding of USD 1.4 billion to Italian state for supporting silicon box in the construction of a semiconductor advanced packaging and testing facility in Italy. Such organizational support will boost the market in Italy.
  
• Spain advanced packaging market is projected to reach USD 1 billion by 2034. Spain is having strong manufacturing base to several semiconductor companies. Additionally, Country’s geographical location gives easy access to the European market, making it an attractive location for semiconductor advanced packaging manufacturers to establish their operations.
  

In 2024, Asia Pacific accounted for a share of 43.3% of the global advanced packaging market. The presence of leading semiconductors manufacturing key players in the region coupled with government support is driving the market in this region.

• The China advanced packaging industry is expected to grow at a CAGR of 11.1% during the forecast period. Due to U.S. HPC chip export restrictions, China is focusing on the accelerating its market to address supply chain constraints. Companies are focusing on advanced packaging by investing into it, for example, top market players from China such as HT-Tech and Tong Fu Advance are investing billion-dollar in advanced packaging projects.
  
• Japan is expected to account for a share of 18.4% of the advanced packaging market in Asia Pacific. In March 2024, TSMC announced its plan of establishing advanced chip packaging capacity in Japan. TSMC’s expansion follows significant government subsidies and growing investments in Japan’s semiconductor sector. Such strategies help Japan to position itself as a key player in the global market.
  
• South Korea advanced packaging market is expected to grow at a CAGR of 13.2% during the forecast period. In September 2024, South Korea announced investment of USD 205 million in R&D of semiconductor packaging to strengthen advanced packaging capabilities such as 3D stacking and heterogeneous integration. This step has taken to enhance South Korea’s global position, driving technological advancements and fostering domestic packaging capacity to gain competitive edge. This government support will boost the market in South Korea.
  
• Advanced packaging market in India is expected to grow at a highest CAGR of 13.7% during the forecast period. Owing to conducive environment in India companies are expanding their semiconductor business in India, for example, in September 2024, Henkel announced its plan to open an applications lab in Chennai by 2025 to support local manufacturers. This strategy of expansion of company’s focus on semiconductor in India is emphasizing on advanced packaging solutions like flip-chip and fan-out designs.
  
• The advanced packaging market in ANZ is expected to grow at a CAGR of 10.5% during the forecast period. The adoption of advanced packaging in ANZ is supported by increasing demand for reducing energy consumption. New Zealand has strong focus on sustainability and renewable energy. Therefore, it is showcasing growing interest in the development and adoption of advanced technologies, such as advanced packaging to reduce energy consumption. As the country continues to invest in advanced technology, the market will grow steadily in ANZ region.
  

In 2024, Latin America accounted for a share of 4.6% of the global advanced packaging market.

• Brazil advanced packaging industry is expected to grow at a CAGR of 10.6% during the forecast period. The growth of market in Brazil is attributed to the demand for advanced semiconductor with advanced packaging technology. Industries in Brazil are shifting from traditional to more advanced forms of packaging such as 2.5D/3D, multi-chip modules (MCMs), and system-in-package (SiP).
  
• Mexico advanced packaging market is expected to grow at a CAGR of 8.4% during the forecast period. The growth of market in Mexico is attributed to increasingly end user industries demand for advanced packaging. Geographical proximity to U.S. and low cost labor is the primary reason for growth of semiconductor industry in Mexico. Also, same factors can drive the market in Mexico.
  

In 2024, Middle East and Africa accounted for a share of 3.6% of global advanced packaging market.

• In 2024, UAE accounted for 33.5% of the Middle East & Africa advanced packaging industry. The UAE market is driven by growing demand for smart packaging solutions, government initiatives supporting manufacturing.
  
• Saudi Arabia advanced packaging market is expected to grow at a CAGR of 6.7% during the forecast period. Saudi Arabia market is driven by government investments in semiconductor manufacturing, growing electronics demand, and sustainability initiatives. Government initiative such as Saudi Semiconductor Forum is encouraging industry collaboration, and another initiative like  Vision 2030 is promoting localization, and attracting global players. These steps will boost advanced packaging capabilities in the region.
  
• South Africa advanced packaging market will reach USD 473.4 million by 2034. The growing demand for electronics, government support for local manufacturing, and sustainability initiatives.
  

Advanced Packaging Market Share

The advanced packaging industry is competitive and moderately consolidated with the presence of established global players as well as local players and startups. The top 5 companies in the global market are ASE Group, Taiwan Semiconductor Manufacturing Company Limited (TSMC), Tongfu Mikcroelectronics Co. Ltd., JCET Group Co., Ltd., and Powertech Technology Inc., collectively accounting for a share of 31.9%. Taiwan Semiconductor Manufacturing Company (TSMC) leads in scaling IC packaging. Their Integrated Fan-Out (InFO) technology is widely adopted for providing high performance and reducing power consumption. For instance, TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) technology enables the integration of multiple chips on a single package, which plays an important role in high-performance computing and AI applications.

Advanced Semiconductor Engineering (ASE) Group is a pioneer in System-in-Package (SiP) technology. SiP technology integrates multiple ICs and passive components into a single package, which reduces size and improves performance of electronics devices. SiP solutions offered by ASE group are widely used in automotive, consumer electronics, and IoT applications.

ASE Group is expanding their business by increasing its production capacity . For instance, in February 2025, ASE launched its fifth plant in Penang, Malaysia, expanding its facility to 3.4 million square feet. This step had taken to enhances advanced packaging and testing capabilities, supporting AI, HPC, and automotive applications. This expansion strengthens ASE’s role in the global semiconductor supply chain amid rising demand for next-gen chip packaging technologies.

Taiwan Semiconductor Manufacturing Company Limited (TSMC) primarily competes in the market by collaborating with other organizations to accelerates production cycles of electronic devices. 

Tongfu Mikcroelectronics Co. Ltd provides a wide range of advanced packaging technologies by increasing investment in R&D.

Advanced Packaging Market Companies

Top 5 companies operating in the advanced packaging industry are:

• ASE Group
• Taiwan Semiconductor Manufacturing Company Limited (TSMC)
• Tongfu Mikcroelectronics Co. Ltd.
• JCET Group Co., Ltd.
• Powertech Technology Inc.
  

Advanced Packaging Industry News

• In January 2025, Micron announced the groundbreaking of a USD 7 billion High-Bandwidth Memory (HBM) advanced packaging facility in Singapore, set to begin operations in 2026. The facility will support AI-driven semiconductor demand, create up to 3,000 jobs, and integrate AI automation and sustainable practices, strengthening Singapore’s semiconductor ecosystem and Micron’s advanced packaging leadership.
  
• In October 2024, TSMC and Amkor announced their partnership to establish advanced packaging and testing capabilities in Peoria, Arizona. This collaboration will integrate TSMC’s InFO and CoWoS technologies, enhancing semiconductor manufacturing for AI and HPC applications. The proximity to TSMC’s Phoenix fabs accelerates production cycles, reinforcing the U.S. semiconductor ecosystem and supply chain resilience.
  

This advanced packaging market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Million) & (Volume Unit) from 2021 to 2034, for the following segments:

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Market, By Packaging Type

• Flip-chip
• Fan-in Wafer Level Packaging (WLP)
• Embedded-die
• Fan-out
• 2.5D/3D

Market, By Application

• Consumer Electronics
• Automotive
• Industrial
• Healthcare
• Aerospace & Defense
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa