Packaging Manufacturers Strive to Meet Capacity Demands

Staff -- Semiconductor International, 9/1/1998

F or years, changes in the electronic packaging market occurred only to meet the semiconductor industry's demands. However, over the last few years the packaging industry has left the semiconductor industry in the dust technologically by introducing several new types of packages, all vying to be the package for the next wave of integrated circuits (ICs).

According to strategic research conducted by Frost & Sullivan, U.S. Advanced Electronic Packaging Markets, the market is experiencing rapid growth in every segment, and this trend is expected to continue throughout the forecast period 1998 to 2004. In 1997, the total market for advanced electronic packaging reached almost $7.9 billion.

"The new advanced packages tend to be smaller and lighter than their predecessors, as well as more powerful in terms of providing more input/outputs for the enclosed IC," said Frost & Sullivan analyst Matt Saltz. The market will continue to evolve as manufacturers strive to make their packages less expensive and easier for electronics manufacturers to use.

The ball-grid-array (BGA) market is expected to slow through 2004, as the flip-chip and chip-scale packaging (CSP) markets increase their shares. Both markets are expected to fluctuate toward the end of the forecast period, because price reductions from refined manufacturing processes take place at different rates. The multi-chip modules (MCM) market should lose market share through 2001, at which time it is expected to grow because of fewer price reductions due to the package's customized nature.

Market participants face the threat of a downturn in the economy, such as in Asia. Asian companies in the electronic packaging market may not be able to borrow the capital required to continue manufacturing. The threat of manufacturing the wrong type of package is also of concern to participants. Currently, most packages can be substituted for each other, and no decision has been made as to what the correct package will be. Once a design has been determined, alternative package manufacturers may have trouble finding customers for their products.