Huachuang Securities has released a research report indicating that rising AI and high-performance computing demand is driving advanced packaging to evolve from a back-end process into a system-level integration platform. The global advanced packaging market is projected to reach $67.4 billion by 2029, while increasing process complexity is expected to boost the global advanced packaging materials market to 164.7 billion yuan by 2030, with the Chinese market potentially reaching 36.5 billion yuan. The report highlights the growth potential in advanced packaging materials, where additional process steps and upgraded material performance will expand opportunities for domestic suppliers.
Key insights from Huachuang Securities:
AI/HPC demand pushes advanced packaging toward system-level integration platforms
As advanced process node scaling faces constraints in cost, power consumption, and yield, relying solely on transistor shrinkage to enhance chip performance has become increasingly difficult. Chiplet and heterogeneous integration approaches are emerging as critical pathways to sustain compute growth. AI accelerators require the integration of logic chips, HBM, and I/O dies within a single package, placing higher demands on memory bandwidth, interconnect density, and thermal dissipation. Advanced packaging has thus become a key determinant of system performance and power efficiency. According to Yole data, the global advanced packaging market is expected to grow from $40.76 billion in 2024 to $67.44 billion in 2029, representing a compound annual growth rate of 10.6%. The share of advanced packaging in the global OSAT market is projected to increase from 40.2% to approximately 50%.
Chiplet and HBM drive advanced packaging toward high-density lateral interconnect and 3D vertical integration
In lateral interconnect, fan-out technology uses multiple RDL layers to route I/O from the chip footprint to a larger area, while 2.5D packaging enables high-density connections between logic dies, HBM, and I/O dies through silicon interposers, RDL interposers, or local silicon bridges. In vertical integration, 3D packaging utilizes TSV vertical channels combined with micro-bumps or copper-to-copper hybrid bonding to stack multiple dies. As interconnect pitch continues to shrink, connection forms within packages are evolving from larger-pitch solder bumps toward copper pillars, micro-bumps, and bumpless hybrid bonding. Meanwhile, to accommodate larger package sizes and improve warpage control, signal integrity, and manufacturing efficiency, technology routes such as large-format FCBGA, glass-core substrates, and panel-level packaging are accelerating development.
Global advanced packaging enters platform-based competition as domestic players accelerate industrialization
TSMC, Intel, and Samsung have each built advanced packaging platforms around 3DFabric, EMIB/Foveros, and I-Cube/X-Cube respectively, with competition scope now covering design, wafer manufacturing, interposers, packaging, and testing. Advanced packaging capability has gradually become an integral part of high-end chip manufacturing systems. Domestically, JCET, Tongfu Microelectronics, Huatian Technology, SJ Semi, and Yong Silicon are building on flip-chip, wafer-level packaging, and SiP foundations, continuously extending toward Fan-out, FCBGA, and 2.5D/3D packaging. Several projects have entered mass production, small-batch trial production, or customer validation stages.
Increasing process complexity expected to drive global advanced packaging materials market to 164.7 billion yuan by 2030, with China reaching 36.5 billion yuan
Multi-layer RDL, fine-pitch bumps, TSV, wafer thinning, and hybrid bonding will increase demand for packaging substrates, dielectric materials, photoresists, plating chemicals, metal targets, CMP materials, and cleaning solutions. Large-format and high-power packages are also driving underfill, molding compounds, adhesives, and thermal interface materials toward lower warpage, higher reliability, and improved thermal conductivity. According to Frost & Sullivan data, the global advanced packaging materials market is expected to grow from 104.4 billion yuan in 2025 to 164.7 billion yuan by 2030, while the Chinese market is projected to expand from 20.3 billion yuan to 36.5 billion yuan over the same period, with China growing at a faster rate than the global average.
Risk warnings: Risks include weaker-than-expected AI and high-performance computing demand, slower-than-expected industrialization of advanced packaging technologies, extended customer certification cycles, delays in domestic materials development, underutilization of new capacity, intensifying industry competition, rapid technology route iterations, and international trade frictions and supply chain disruptions.
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