Telecoms & Computing

Overview of China’s Semiconductor Packaging Industry

Semiconductors are small devices which are used in controlling the passage of electrical currents in electronics devices. Semiconductor devices broadly include both single discrete devices, such as a single transistor and a resistor, and other more complex electronics devices such as ICs, LEDs and PCBs, which consist of a number (from a few to thousands) of devices manufactured and interconnected on a single semiconductor substrate. Semiconductors are the key building block of modern electronic devices and systems and have spread to wide ranging applications from consumer products including televisions, laptop computers, tablets, and mobile phones, to more sophisticated equipment used in aerospace, business operations, industrial applications, and national defense. The semiconductor value chain and a host of supporting activities form a complex and global semiconductor ecosystem.

The semiconductor value chain primarily involves five production stages, namely, (i) research, (ii) designing, (iii) manufacturing, (iv) packaging and testing and (v) distributing. Packaging is one of the most crucial steps to ensure the performance of semiconductor products. Packaging, also called assembly, is the processing of bare semiconductors into finished semiconductors and serves to protect the die and facilitate electrical connections and heat dissipation. The patterned silicone wafer received from semiconductor manufacturers are diced by means of diamond saws into separate dies, also called chips. Each die is attached to a lead frame or a laminate (plastic or tape) substrate by epoxy resin. A lead frame is a miniature sheet of metal, generally made of copper and silver alloys, on which the pattern of input/output leads has been cut. On a laminate substrate, typically used in ball grid array packages, the leads take the shape of small bumps or balls. Leads on the lead frame or the substrate are connected by extremely fine gold wires or bumps to the input/output terminals on the chips, through the use of automated machines known as “wire bonders”. Each chip is then encapsulated, generally in a plastic casing molded from a molding compound, with only the leads protruding from the finished casing, either from the edges of the package as in the case of the lead frame-based packages, or in the form of small bumps on a surface of the package as in the case of ball grid array or other substrate-based packages. Stimulated by the growth in semiconductor product industry, the market size of semiconductor packaging industry in China has also witnessed a remarkable growth. With the supportive policies promulgated by the PRC government in the semiconductor product industry and the development of technology and popularisation of advanced packaging, the market size of China’s semiconductor packaging industry is forecast to experience a further growth and reach approximately RMB981.1 billion in 2022, at a CAGR of approximately 15.9% from 2018 to 2022. As one of the most basic electronic components, IC and photoelectron occupy the largest and the second largest market shares in China’s semiconductor product industry and semiconductor packaging industry, accounting for approximately 38.9% and 31.6% of total market size of China’s semiconductor packaging industry, respectively in 2017. As a significant segment of photoelectron packaging, the market size by revenue of LED packaging were approximately RMB114.6 billion in 2017, accounting for approximately 77.7% of the photoelectron packaging market.

Over the years, semiconductor packaging technologies had experienced rapid development and changed significantly, from through hole mounting in the 1970s, surface mount in the 1980s and to array semiconductor packaging in the 1990s. After the 2000s, to further improve the performance of chips, new packaging technology such as three-dimensional or through-silicone via are adopted so that the size of IC or discrete component can be reduced greatly. The constant demand for high-performance, small-sized semiconductors to satisfy the ever-changing requirements of a wide range of industries is therefore one of the key drives to the semiconductor packaging industry and the semiconductor packaging materials industry.

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