AI Market Today and Beyond: Transforming the Future of Advanced Packaging

Fan-out packaging is a versatile semiconductor packaging technology that provides optimized form factor, high signal integrity at high frequencies, high I/O density and low thermal resistance. Fan-out can be utilized for various 2.5D and 3D multi-chip integrations, and it is gaining popularity in HPC, AI, and networking segments. We estimate that in 2023 the fan-out market reached $1.7B of revenues and will grow with a CAGR of 14% to reach about $3.7B in the next five years. Fan-out Panel Level Packaging (FOPLP) has been hyped as the solution for the widespread adoption of fan-out, given the area efficiency and cost-benefit compared to wafer. The technology is already present but with very low volumes for low to mid-end applications. With the AI boom, panel level packaging started being seen as an opportunity to scale production, create capacity and assemble large packages in a cost-effective way. New companies like Innolux, ECHINT, STMicroelectronics, Silicon Box, and even TSMC, are developing the technology and some are already building new panel lines to target different applications, from low-end and cost sensitive to high-end and performance driven. In 2023, we estimated that panel production had a penetration rate of 6% in the fan-out packaging market, with a total production of 25K panels (or 100K 300mm wafer equivalent), and taking 4% of the fan-out revenue. In 2029, we expected that in the best possible scenario, FOPLP will have a 24% penetration rate in fan-out total production. In that best possible scenario, revenues generated by FOPLP will take approximately 27% of the fan-out market in 2029. The success of PLP penetration will depend on the maturity of the technology and on the yields attained for large, complex packages that integrate multiple dies. If the technology becomes ready enough, than it shows great potential to take over the higher-end packaging segments with chiplet and heterogeneous integration approaches.