The advanced IC substrate market (henceforth, referred to as the 'market studied') was valued at USD 7.73 billion in 2020, and it is expected to reach USD 10.49 billion by 2026, with a CAGR of 5.3% over the forecast period 2021-2026.​ Players are continuously advancing over the packaging technologies to answer their stringent requirements with a smaller footprint, higher performances, and lower power consumption. The demand for consumer electronics and mobile communication devices drives electronics manufacturers to deliver ever-more compact and portable products.

- The advanced substrate industry follows miniaturization trends, greater integration, and higher performance, thereby, making huge investments by several players across the ongoing ED and SLP packaging and showing an increased interest in such technologies.

- The higher power density and board integration result in thermal benefits, thereby, enabling further improvements in system reliability. Such technology brings huge value to the market due to extended adoption across automotive applications.
- It is also driving across the telecom and infrastructure segment, where ED is a suitable substrate solution for increased hardware efficiency. Due to this, players are investing huge amounts in new plants where ED is expected to be the main product constituent.

- The advent of 5G, which influenced the demand in 2018, is expected to be continued, as the use of FCBGA in 5G base stations and HPCs is increasing in countries that adopt the communication technology, worldwide.
- With the COVID-19 outbreak, the IC substrate production came to an abrupt end in China from February 2020 to March 2020. Thus, this influenced the demand for the product, worldwide, and influenced the price. With the increasing number of cases in the United States, the North American electronics industry is under pressure due to the lack of raw materials and products, as the global supply chain is disrupted.

Key Market Trends

Rising Application of Advanced Substrates in Manufacturing of IoT Equipment to Drive the Market Growth

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- The global demand for IoT is augmented by the consumer and industrial sectors, as the growing application of the technology is driving the demand from both sectors. According to the Internet & Television Association, by 2020, the global growth of IoT was expected to reach 50.1 billion units. ​
- The growth in demand is augmenting the vendors to produce IoT specific chipsets. Some of the major IoT chipset vendors operating in the market include Altair, Huawei, Intel, Qualcomm, Samsung, and Sierra, among others. Moreover, Qualcomm's networking solutions for Wi-Fi environments, such as Pro 1200, are embedded with FCBGA.

- With the increase in sheer numbers of IoT devices, the chip requirement for building IoT devices is expected to skyrocket over the forecast period. Moreover, the innovation in reducing energy consumption, combined with the miniaturization of chips, is likely to be the priority of manufacturers. ​
- The growth in IoT is helping IC substrate manufacturers. For instance, Apple is moving to adopt TSMC's antenna in package technology and ASE's FC_AiP process, to package mmWave antenna for its 5G iPhones and 5G iPads set to launch in 2020. The growth in IoT has resulted in greater use of the latest semiconductor packages that can enhance the performance of ICs and minimize the cost in various instances. ​

Asia Pacific to Register the Fastest Growth During the Forecast Period

- The growth of the semiconductor packaging manufacturer in the region correlates with the end user's growth in the region as the fastest-growing market for smartphones, thereby, witnessing a rising investment in renewable and automotive (EVs specifically), among various others.

- Some of the prominent players across the region have invested in the advancement in IC fabrication technology. For instance, in 2018, Taiwan-based Powertech Technology announced an investment of more than USD 1.68 billion in the country, in an advanced factory, to ride on the next technology wave of high-performance computing and connected cars. This is set to fuel innovation in the advanced IC substrates in the applications mentioned above.

- Moreover, investments in the smartphone segment in the Asia Pacific countries are expected to drive the demand for advanced IC substrates. For instance, in 2018, Samsung inaugurated its new mobile phone manufacturing facility in Uttar Pradesh, India, as the world’s largest mobile devices manufacturing factory.

Competitive Landscape

The advanced IC substrates market is moderately competitive and consists of a few major players. In terms of market share, some of the players currently dominate the market. However, with advancements in IC packaging technology, new players are increasing their market presence, thereby, expanding their business footprint across emerging economies.

- June 2019 - TTM Technologies Inc. announced that it agreed to acquire certain manufacturing and intellectual property assets from i3 Electronics Inc. This is to strengthen its advanced technology PCB capabilities and IP portfolio for emerging applications in the aerospace and defense end market and high-end commercial customers.

- June 2019 - Kyocera Corporation and Vicor Corp. collaborated on developing next-generation, power-on-package solutions to maximize performance and minimize time-to-market for emerging processor technologies. As a part of the collaboration between the two technology leaders, Kyocera may integrate power and data delivery to the processor with organic packages, module substrates, and motherboard designs. Vicor Corp. is expected to provide power-on-package current multipliers, enabling high density, high current delivery to processors.

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