The global flip chip market was valued at USD 27 billion in 2021 and is estimated to reach an expected value of USD 45 billion by 2030, registering a CAGR of 6.3% during the forecast period (2022 – 2030).
Utilizing solder bumps onto the chip pads, the flip chip, also known as the controlled collapse chip connection (C4), is used to connect semiconductor devices, such as IC chips, microscopic devices, microsensors, and microprocessors, to external circuitry. Over traditional wire bonds, using flip chip interconnections has many benefits, including better thermal and electrical performance, smaller form factors, clearly defined construction, substrate flexibility for varying performance requirements, and the highest I/O capability.
The rise in demand for circuit miniaturization, the increasing popularity of the Internet of Things (IoT), and technological advancements over wire bonding are the main factors driving the growth of the global flip chip market. Furthermore, it is anticipated that the market will benefit significantly from the surge in demand for sensors in the smartphone industry and the increased integration of flip chips in personal electronic devices like PCs and mobiles.
An increase in demand for electronic products' high-speed and compact size has fueled the need for flip chips. In addition, module size reduction and enhanced electrical & thermal performance are the critical requirements of portable electronic products such as smartphones, digital cameras & camcorders, laptops & tablets, wearable electronics, and household electronics. Moreover, the Internet of Things (IoT) has been gaining popularity in the industry and is considered the third wave of packaging technology. The IoT products, such as sensors & actuators, analog & mixed signal translators, microcontrollers, or embedded processors, require efficient and reliable packaging solutions. The incorporation of flip chips can meet these requirements. Flip chip assembly is expected to increase in these industry verticals, owing to its high performance, small packaging size, and hybrid integration capability. Therefore, the increased popularity of IoT and penetration of portable electronics are expected to foster the growth of the flip-chip market.
The adoption of flip chips has increased in recent years due to the need to miniaturize electronic circuits in microelectronic devices. Flip chip is a promising packaging technology for the fast-growing electronic industry, owing to its superior electrical performance at high frequencies. With the decrease in the size of electronic devices for ease of user access, the demand for compact electronic circuitry has been accelerating. Flip chip interconnect meets the demand and offers numerous advantages such as superior functionality & efficiency of the electronic circuit, reduced size, high reliability, minimal signal inductance& power inductance, and strong signal density. Flip chip has been gaining popularity in industry segments such as automotive, telecommunication, consumer electronics, industrial, and healthcare. Thus, all these factors collectively contribute to the growth of the global market.
Demand for flip chip interconnect technology is driven by its advancements over wire bonding technology. Wire bonding technology requires more space to pack ICs, and the wires consume additional power. Furthermore, owing to the usage of wires for making connections, the reliability of these chips has decreased, which increases the chances of malfunction due to losing connections. Flip chips offer a range of advantages as compared to customary wirebond packagings, such as high I/O capability, superior thermal & electrical performance, substrate flexibility for varying performance requirements, well-established process equipment proficiency, and reduced form factors.
Moreover, the flip chip serves as a cost-effective, efficient & reliable packaging technology and an innovative packaging solution, which has been meeting customers' demands and driving the designers to maximize package performance. Therefore, ongoing advancements and various technological superiority of flip chips over alternatives are expected to propel the growth of the flip chip market in the near future.
As per the table above, relatively higher costs and the availability of fewer customization options in flip chips restrain the growth of the global flip chip market. For instance, in 2019, wire bonding accounted for more than 33% of the total packaging market, as it is available at a considerably lower cost and meets all interconnection needs of most devices. However, flip chips witnessed substantial growth in adoption, owing to their various advantages, such as less space consumption, low-power requirements, and high efficiency.
The increase in the cost of the flip chip is contributed by the complexity of the manufacturing process, the requirement of high-precision flip chips, the use of additional wafer bumping, and the high cost of substrate used for the fabrication. Furthermore, after the fabrication of flip chips, further customization regarding the number of I/O ports or connections is not possible, as it has a complex design in a small space.
However, the impact of this restraint is anticipated to reduce in the near future, owing to various technological advancements enabling more connections in smaller sizes and reduced costs. In addition, heavy investment in various research and development facilities by key players in the market is expected to drive the growth of the flip chip market.
The flip chip market foresees a substantial growth opportunity in the future, owing to its ability to function effectively in high-frequency operations. In addition, incorporating high-frequency chips in electronic gadgets such as smartphones, laptops, and tablets has significantly contributed to the growth of the global market. In wire bonding, owing to the usage of wires, the efficiency remains low, and they cannot perform high-frequency operations. Thus, the superiority of flip chips over wired connections, such as smaller length of connection, less power consumption, higher efficiency, and high frequency of data & instruction transmission, propel their demand over wired connections, which is anticipated to offer remunerative opportunities for the expansion of the market during the forecast period.
The market is categorized into 3D IC, 2.5D IC, and 2D IC. The 2.5D IC segment was the highest contributor to the market and is estimated to grow at a CAGR of 6.4% during the forecast period. 2.5D IC packaging technology adds a silicon interposer substrate (either passive or active) between the SiP substrate and the dice to provide much finer die-to-die interconnections, thereby increasing performance and reducing power consumption. The smaller size compared to other packaging technologies, enhanced performance, capability to pack more chips, and higher efficiency are the key factors driving the adoption of 2.5D IC flip chips globally. Furthermore, an increase in the production of through-silicon via (TSV) is projected to offer lucrative market growth opportunities. This is attributed to the fact that TSV is widely used to create 3D packages and 3D integrated circuits, supporting market growth.
The market is fragmented into electronics, industrial, automotive & transport, healthcare, IT & telecommunication, aerospace & defense, and others. The electronics segment was the highest contributor to the market and is estimated to grow at a CAGR of 5.1% during the forecast period. Over the past five years, a significant increase has been witnessed in R&D activities of flip chip technology due to new requirements for package density, performance, and interconnection in the electronic industry. Flip chip enhances the four essential elements of microelectronic products, including electrical connection of chip, chip encapsulation of chips, connection of the package to circuit boards, and structure of the package, which increases its demand among different electronic products.
The market is segregated into the copper pillar, solder bumping, gold bumping, and others. The copper pillar segment was the highest contributor to the market and is estimated to grow at a CAGR of 6% during the forecast period. Cu pillar is a low-cost fine pitch bumping technology for flip chips. The advances in copper pillars make them an ideal interconnect option for applications such as transceivers, embedded processors, power management, baseband, ASICs, and SOCs. Moreover, companies have been incorporating this technology in their products, as it is less expensive with a higher current density than other technologies, such as gold bumping. The demand for copper pillar bumping technology is majorly driven by its lower cost, high circuit performance, easy availability, and enhanced durability compared to other bumping technologies. Furthermore, the advantages of this technology, such as reduced bump pitch and maintaining standoff with reduced pitch, are anticipated to offer potential opportunities for market growth in the near future.
Asia-Pacific was the highest revenue contributor and is estimated to grow at a CAGR of 7.2%. Asia-Pacific dominates the global flip chip market. This trend is expected to prevail during the forecast period, owing to the vast presence of fabrication facilities and extensive research & development by key players such as TSMC Ltd. and Fujitsu. Asia-Pacific includes nations such as China, Japan, and South Korea, which are the largest consumers and producers of personal electronics equipment. For consumers, electronics account for the largest share of the market in Asia-Pacific. This is anticipated to maintain its dominant position during the next ten years. In 2019, China and Japan together accounted for around 67% of the total Asia-Pacific market, owing to the presence of electronics manufacturing facilities. From a growth perspective, China, Japan, and Taiwan are the potential markets expected to witness considerably higher growth rates during the forecast period, as key players are launching innovative technology related to flip chips. Thus, all these investments and innovations are expected to drive the growth of the Asia-Pacific flip chip market.
North America is the second largest region. It is estimated to reach an expected value of USD 10.5 billion by 2030 at a CAGR of 4.9%. The growth of the North American flip chip market is expected to be slow-footed. However, the semiconductor industry in the U.S. has advanced research and development facilities, owing to the presence of global giants in the region. Among all the countries in the region, the U.S. accounts for over 70% of the market share, which Mexico and Canada follow. The countries in the region export semiconductor materials and equipment, thus making it a significant exporter of flip chips and equipment in which flip chips are installed. Electronics and healthcare applications have always been the prominent drivers of flip chips in the North American market. Flip chips are gaining traction over wire bonding in the global market due to the rise in demand for circuit miniaturization in portable electronics and high-frequency applications. Furthermore, the market has observed heavy investments in R&D facilities and collaboration by the key players, which makes it the second largest region in the flip chip market.
Europe is the third largest region. Europe constitutes nearly 16% of the overall flip chip market. The demand for flip chips in the region is majorly propelled by the number of applications in the healthcare and automotive sectors. The presence of developed nations and government initiatives to improve healthcare facilities in the region have boosted the incorporation of advanced healthcare devices, propelling the need for flip chips in the European market. Furthermore, Europe is a hub of luxury car manufacturers and consumers. This augments the requirement of advanced electronic components in engine control units and other infotainments, thereby driving the demand for flip chips. Germany accounted for 40% of the total market share, owing to several automotive and electronic facilities. However, with technological advancements through research and the discovery of low-cost replacement of raw materials, flip chip production in Europe might increase in the next five to six. Thus, all these factors are anticipated to drive market growth during the forecast period collectively.
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