Huachuang Securities: Advanced packaging upgraded to a system-level integrated platform, and the pace of industrialization of domestic enterprises accelerated

The Zhitong Finance App learned that Huachuang Securities released a research report saying that the increase in AI/HPC demand is driving the upgrade of advanced packaging from back-end processes to system-level integrated platforms. The global advanced packaging market is expected to reach 67.4 billion US dollars in 2029; increased process complexity is expected to drive the global advanced packaging materials market to grow to 164.7 billion yuan in 2030, and the Chinese market is expected to reach 36.5 billion yuan. Focus on the incremental space of materials in the field of advanced packaging. Increased process steps and material performance upgrades will expand the introduction space for local suppliers.

The main views of Huachuang Securities are as follows:

Increased demand for AI/HPC is driving the upgrading of advanced packaging from back-end processes to system-level integrated platforms. The global advanced packaging market is expected to reach US$67.4 billion in 2029

1) Currently, advanced process miniaturization faces cost, power consumption, and yield constraints. Relying solely on transistor scaling to improve chip performance is increasing, and Chiplet and heterogeneous integration are gradually becoming an important path for continuing the growth of computing power. 2) AI accelerators need to integrate logic chips, HBM, and I/O chips in the same package, which places higher demands on storage bandwidth, interconnection density, and cooling capacity. As a result, advanced packaging has become a key aspect affecting system performance and power consumption. According to Yole data, the global advanced packaging market is expected to grow from US$40.76 billion in 2024 to US$67.44 billion in 2029, with a CAGR of 10.6%; the share of advanced packaging in the global packaging and testing market is expected to increase from 40.2% to about 50%.

Chiplet and HBM drive the evolution of advanced packaging to high-density horizontal interconnect and 3D vertical integration

1) In terms of horizontal interconnection, Fan-out uses multi-layer RDL to fan out I/O from the chip range to a larger area; 2.5D packages use a silicon interlayer, RDL intermediary layer, or local silicon bridge to achieve high-density interconnection between logic chips, HBM, and I/O chips. 2) In terms of vertical integration, 3D packaging passes through vertical channels such as TSV, and combines micro-bumps or copper-copper hybrid bonding to complete multi-layer die stacking. As the interconnection spacing continues to shrink, the connection pattern within the package evolved from large-pitch solder bumps to mixed bonding with copper columns, micro-bumps, and no bumps. At the same time, in order to carry a larger package area and improve warpage control, signal integrity, and manufacturing efficiency, technology routes such as large-size FCBGA, glass core substrates, and panel-level packaging are being developed at an accelerated pace.

Global advanced packaging has entered the stage of platform-based competition, and the pace of industrialization of domestic enterprises is accelerating

1) TSMC, Intel, and Samsung have each built advanced packaging platforms around 3DFabric, EmiB/foveros, and i-Cube/ X-cube. The scope of competition has covered design, wafer manufacturing, intermediary layers, packaging and testing, and advanced packaging capabilities have gradually become an important part of high-end chip manufacturing systems. 2) Domestic Changdian Technology, Tongfu Microelectronics, Huatian Technology, Shenghe Jingwei, and Ningbo Silicon Electronics continue to expand to FAN-out, FCBGA, and 2.5D/3D packaging based on inverted, wafer-level packaging, and SiP. Some projects have already entered large-scale production, small-scale trial production, or customer verification.

Increased process complexity is expected to drive the global advanced packaging materials market to grow to 164.7 billion yuan in 2030, and the Chinese market is expected to reach 36.5 billion yuan

1) Multi-layer RDL, fine pitch bumps, TSV, wafer thinning, and hybrid bonding will increase the demand for packaging substrates, dielectric materials, photoresists, electroplating solutions, metal targets, CMP materials and cleaning solutions; large size and high power packaging will drive the upgrading of bottom fillers, encapsulants, adhesives, and thermal interface materials to low warpage, high reliability, and high thermal conductivity. 2) According to Frost & Sullivan data, the global advanced packaging materials market is expected to grow from 104.4 billion yuan in 2025 to 164.7 billion yuan in 2030; the Chinese market is expected to grow from 20.3 billion yuan to 36.5 billion yuan, and China's growth rate is higher than that of the world during the same period.

Risk warning: the risk of AI and high-performance computing demand falling short of expectations; the risk of industrialization of advanced packaging technology falling short of expectations; the risk of a long certification cycle for downstream customers; the risk of insufficient utilization of domestic materials; the risk of insufficient utilization of new production capacity; the risk of increasing industry competition; the risk of rapid iteration of technology routes; international trade friction and supply chain risks.