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IC packaging industry to grow further

Posted: 22 Aug 2008     Print Version  Bookmark and Share

Keywords:IC packaging industry  IC unit shipments  prices per I/O  packaging revenue 

The IC packaging industry is expected to grow further as semiconductor outlook is quite positive, reports Electronic Trend Publications (ETP). With 15,100 crore (151 billion) ICs produced, the value of the worldwide IC packaging market was Rs.130,718.30 crore ($30.50 billion) in 2007. Modest growth would be seen this year and in 2009, before accelerating in 2010.

IC Unit Forecast

As Figure 1-1 illustrates, IC unit shipments will grow a compound annual growth rate (CAGR) of 11.6 per cent from 15,100 crore (151 billion) units in 2007 to 26,200 crore (262 billion) units in 2012.

IC Revenue Forecast

ETP says that IC revenue growth should nearly equal unit growth over the forecast period given that the industry is cautious in the addition of capacity. The packages often referred to as CSPs—DFNs, QFNs, FBGAs/DSBGAs and WLPs—will experience the highest growth rates over the forecast period. Figure 1-2 illustrates IC revenue growth.

Price per I/O

The average prices per I/O are most representative at rather high levels of aggregation. As the infrastructure for newer packages continues to mature, the price per pin of these packages will approach that of older packages.

Revenue by package

ETP also forecasts "packaging revenue." Had independent companies assembled all IC packages, the total assembly revenue would have been Rs.130,718.30 crore ($30.5 billion) in 2007. This revenue is predicted to expand to Rs.201,434.76 ($47 billion) by 2012. IC packaging revenue growth will trail unit growth over the next five years as competitive forces push packaging ASPs down slightly.

Contractor units and revenue

Last year, 4,870 crore (48.7 billion) ICs were assembled by packaging contractors, according to ETP. Contractor volume will grow to 8,400 crore (84 billion) packages in 2012. Contractor IC packaging revenue is expected to grow to Rs.96,431.54 ($22.5 billion) in 2012 from Rs.51,858.74 ($12.1 billion) in 2007. Much of the recent contractor volume increases have been in low-I/O packages. Future growth should show a slight increase in average I/O count and average package price.

Although the forecast for the semiconductor and IC packaging industries is quite positive, global economic situation will likely present some major challenges in the coming years, says ETP. However, most packaging contractors have been solidly profitable over the last few years and are expected to rise above economic turbulences. Contractors must continue to concentrate on profitable business though.

The recent business outcomes of various packaging contractors show these three keys to success:

- A broad portfolio of packages

- Close relations with the major wafer foundry companies and IDMs

- An extremely lean cost structure

Contractors that focus on these are the most likely to have continued success in the IC packaging business.

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