The global advanced IC substrate market is poised for significant growth, according to recent industry reports. Global Information, Inc. (GII) projects the market to reach US$18.11 billion in 2024 and surge to US$31.54 billion by 2029, with a compound annual growth rate (CAGR) of 11.73%. This growth is primarily driven by advanced packaging (AP) for Flip-Chip Chip Scale Packaging (FC-CSP) and baseband applications, as well as demand from 5G wireless devices, high-performance computing (HPC), graphic processing units (GPUs), servers, and the automotive industry—all major users of Flip-Chip Ball Grid Array (FC-BGA) substrates.
Research from Yole Intelligence, as cited by EDN Taiwan, offers a similar outlook. The IC substrate market is expected to expand from US$12.6 billion in 2021 to around US$24.3 billion by 2027, achieving a CAGR of 12%. Substrate-like PCBs (SLP), primarily used in high-end smartphones, are predicted to increase from US$3 billion in revenue in 2021 to US$4.3 billion by 2027, with a CAGR of 6.7%. Additionally, embedded die (ED) technology, a relatively new player in the market, is forecasted to grow rapidly with a CAGR of 39%, escalating from US$142 million in 2021 to approximately US$1 billion by 2027.
Dr. Yik Yee Tan, senior technology and market analyst at Yole Group, provides a broader perspective, projecting the global advanced IC substrate market to grow from US$15.8 billion in 2021 to approximately US$29.6 billion by 2027, with a CAGR of 11%. This growth is largely driven by high demand in the mobile and consumer, automotive and mobility, and telecom and infrastructure sectors. These industries are pushing the boundaries of IC substrate technology, particularly in advanced packaging for applications such as FC-BGA and FC-CSP.
The growth trajectory is primarily fueled by the demand for FC-BGA and 2.5D/3D advanced packaging technologies, which rely heavily on FC-BGA substrates. As these technologies progress, the need for advanced substrates will continue to rise. While Taiwan, Japan, and South Korea currently dominate the global market, China and the US are also making significant efforts to expand their supply chain presence.
AI demand to fuel global substrate market's revival in 2024
According to the China Times, the IC substrate market faced a downturn in 2023 due to global economic uncertainty and weakened demand, with market value dropping to US$13.34 billion, a 26.7% year-over-year decrease. However, in 2024, the market is expected to rebound, driven by growing demand for AI and 5G technologies, with the global IC substrate market size projected to reach US$15.32 billion, marking a 14.8% annual growth. Taiwan remains the world's largest IC substrate supplier, accounting for 32.8% of the global production value.
The increasing demand for AI products and HPC is driving the need for more complex IC substrates, prompting industry players to innovate and overcome the current limitations of organic IC substrates. As a result, advanced substrates are expected to evolve toward finer line width/spacing (L/S), a higher number of layers, greater I/O density, and larger sizes to meet the diverse needs of various end markets.
The emergence of glass core substrate (GCS) technology is revolutionizing the advanced packaging and IC substrate industry, positioning itself as a potential game-changer. By replacing traditional organic cored substrates with glass, GCS offers a smoother surface capable of accommodating larger areas and more chips, enabling finer wiring and enhanced chip-to-chip connectivity, resulting in superior performance.
Moreover, the absence of a middle substrate layer makes GCS thinner and more energy-efficient. Integrating multi-layer ceramic capacitors (MLCC) within the substrate further optimizes surface space for CPUs, GPUs, and memory, significantly boosting overall chip performance and energy efficiency and meeting the growing demand in AI and HPC sectors.
IC substrate key players
In the global market, Taiwan is the largest supplier of IC substrates, accounting for approximately 32.8% of the total production value. Japan follows with 27.6%, and South Korea holds 27.0%, collectively making up nearly 90% of the market. The top five IC substrate manufacturers are Unimicron Technology from Taiwan, with a 16.0% market share, SEMCO from South Korea with 9.9%, Ibiden from Japan with 9.3%, AT&S Austria Technologie & Systemtechnik Aktiengesellschaft with 9.1%, and Nan Ya PCB from Taiwan with 8.7%, together accounting for more than half of the global market.
Other key players include ASE Group, TTM Technologies Inc., and Kyocera Corporation, with these companies striving to maintain competitive advantage by aligning with new technologies such as 5G telecommunications and high-performance computing.
As for GCS, competition in the market is intensifying as various companies strive to be the first to commercialize GCS-based products. The top three players in this race are Absolics, a subsidiary of South Korea's SK Group, along with Intel and Samsung Electronics.
Since the 2021 supply shortage, companies and governments—particularly in the US and China—have ramped up investments to diversify supply chains and bolster local semiconductor ecosystems. These efforts are geared toward preparing for future demand, especially in high-end substrates like FC-BGA. Despite the entry of new players into the advanced IC substrate market, production remains predominantly concentrated in Asia for the time being.
China's IC substrate growth momentum not to be underestimated
According to PitchBook, Yole Intelligence, and Maximize Market Research, China's IC industry is expected to experience significant growth in the coming years. Data from the Chinese Semiconductor Industry Association shows that from January to September 2021, China's IC industry revenue reached CNY685.86 billion (approx. US$108.4 billion), reflecting a 16.1% year-over-year increase. Additionally, China's IC production in 2021 hit 359.4 billion units, marking a 33.3% annual growth, significantly surpassing the growth rate of 2020. These figures suggest that China is progressively building a more complete semiconductor supply chain, with a strong focus on innovation and R&D to reduce its reliance on imported chips.
In 2023, China intensified the development of its IC industry, with companies like Thinktrans expanding their IC substrate production through significant financing efforts. Thinktrans successfully secured between CNY500 million and CNY1 billion in Series A round to enhance its production capacity. According to IC Insights, by 2026, domestic IC production is projected to account for 21.2% of China's IC market, underscoring the country's growing potential in the IC manufacturing space. The Chinese government's CNY1.43 trillion support plan, coupled with strategic investments in advanced manufacturing equipment, will further accelerate China's push toward self-sufficiency in the semiconductor sector.
All this growth reflects China's increasing demand in sectors such as 5G, AI, and HPC, particularly in the advancements of IC substrates and advanced packaging technologies. China's semiconductor industry has not only achieved significant breakthroughs in mass production but has also demonstrated strong competitiveness in high-end fields like advanced packaging and silicon carbide (SiC). These advancements will be key drivers of China's accelerated growth in the semiconductor sector in the coming years.
Note: 2023-2029 Compound Annual Growth Rate (CAGR) of 11%
Source: Yole Intelligence, compiled by DIGITIMES, September 2024
Note: The global advanced IC substrate market size was US$18.2 billion in 2022.
Source: Yole Intelligence, compiled by DIGITIMES, September 2024
