China Semiconductor Packaging Market Overview

In order to reduce production costs, international semiconductor manufacturers and packaging and testing foundries have transferred their packaging production capacity to China, which has directly stimulated the rapid expansion of the size of China's semiconductor packaging industry. At the same time, the scale of China's chip manufacturing continues to expand and huge and rapid The growth of the terminal electronic application market has also greatly promoted the growth of China's semiconductor packaging industry. The impact of these two factors has made China's semiconductor packaging industry increasingly important in the global semiconductor packaging market despite its financial crisis.

The global financial crisis has had a huge impact on China’s economy. In 2008, China’s economic growth rate reached the lowest level in seven years, with an annual growth rate of only 9%, of which the growth rate in the fourth quarter declined from 9% in the third quarter. At 7%, the continuous financial crisis affected the global consumer buying behavior, resulting in the shrinking of the electronic terminal market. This has also directly affected the status of China's semiconductor market because more than 80% of China's packaging revenue comes from overseas markets. According to data from China Semiconductor Industry Association, China's semiconductor sales increased by 24% in 2007, while the packaging industry increased by 28%. Then in 2008, there have been declines:

China's semiconductor sales fell by 0.4%, mainly because the decline in the fourth quarter was extremely serious (20% compared to the third quarter)

China's semiconductor packaging fell -1.4% compared to 2007, mainly from the depth of the fourth quarter (falling 56% compared to the third quarter)

Semiconductor packaging is an important part of China's semiconductor industry chain. So far, more than 200 companies have competed in the packaging field, although many are small companies that produce low-footprint products. In the initial stage of industrial development, foreign investment and joint venture closure in China The test companies mainly focus on packaging low- and mid-foot-count products that are already relatively mature. However, with foreign companies and joint ventures transferring advanced packaging production lines to China, products based on IC substrates have rapidly grown. Ball Grid Allay, Chip Scale Package, Wafer Level Package and System-in-Package will become the mainstream. Wafer Bumping ) has also begun to take shape. Through silicon technology (Through Silicon Via) has been applied to the image sensors (CMOS Image Sensors) and has been mass production. With the government's special financial support, the technology of local packaging companies is also rapidly progressing. Jiangyin Changdian, Nantong Fujitsu, and Tianshui Huatian were listed separately.

The Yangtze River Delta region is still the most promising area for the packaging and testing industry. However, in order to reduce costs, many packaging and testing companies have chosen the Midwest region to build new factories in recent years. Some integrated device manufacturers and package testing foundry companies have shifted production capacity to the Midwest. In the region, this trend will continue for several years.

China's semiconductor packaging materials market will exceed US$2.2 billion in 2009, an increase of about 1% from 2008. It is expected to reach US$3.1 billion in 2011. In 2004, China’s semiconductor packaging materials market was US$876 million. In 2011, the annual compound growth rate reached 20%, mainly due to the rapid growth of packaging substrates.

China Semiconductor Packaging Materials Market

The average annual compound growth rate (CAGR) from 2004 to 2011 is about 20%. The main growth driver is from the substrate, and the high-end packaging materials are still mainly dependent on imports. In the lead frame section, several new etchings for high-end products have been added. The production line, however, the technology gap between domestic companies and leading overseas companies is still very large. In recent years, copper wire has gradually begun to replace gold wire, which is applied to products with copper wire diameters greater than 2 mil and low foot counts. More than 90% (in meters) The copper wire of the unit) is applied to discrete devices and power devices (lead frame is used as the substrate). The copper wire process applied to the package substrate has also been mass-produced. To reduce the packaging material cost and improve the production efficiency for the packaging plant The main effective way to reduce costs, especially for packaging substrates, lead frames and bonding wires, is that packaging material suppliers will face downward pressures of more than 20% in the future.

China's packaging equipment market reached US$452 million in 2008. Affected by the economic crisis, China's packaging equipment market is expected to decline by about 34% in 2009 to US$300 million. With the rapid growth of the Chinese packaging equipment market, some of the leading equipment vendors Established a production line in China. However, local packaging equipment accounts for less than 15% of the Chinese market and is mainly used in the low-end market.