Advanced Packaging Market Trends in the AI Era

The advanced packaging (AP) market is entering a new phase of robust expansion, fueled by the explosive demand for artificial intelligence (AI). After a decrease in 2023 due to global macroeconomic pressures, the industry rebounded strongly in 2024, reaching more than $50 billion in revenues, showing a 20% year-over-year growth. This marked the beginning of a recovery cycle that is expected to sustain long-term momentum. By 2030, the AP market is projected to exceed $80 billion, representing a CAGR of 8.5% between 2024 and 2030. The AI boom, alongside high-performance computing (HPC), is the primary growth engine, pushing packaging technologies beyond their traditional boundaries.

AI workloads demand exceptional bandwidth between processors and memory, creating the need for advanced integration solutions. This has accelerated the adoption of 2.5D and 3D packaging platforms, with higher average selling prices (ASPs) and broader penetration across leading-edge chips. In fact, Nvidia’s AI GPUs and other AI accelerators show the critical role of AP, leveraging TSMC’s CoWoS technology to deliver the interconnect density and power efficiency required by next-generation AI systems.

The competitive landscape is increasingly shaped by strategic investments and capacity expansions. TSMC significantly scaled its CoWoS production in 2024, reaching more than 500k wafers per year, while also investing in SoIC capacity and expanding into new facilities to meet AI-driven demand. Other leading players, including Intel, Samsung, ASE, and Amkor, are strengthening their portfolios with advanced platforms such as EMIB, Foveros, Panel Level Packaging, and High-Density SiP solutions, while exploring co-packaged optics (CPO) as an emerging technology.

Technology roadmaps are evolving rapidly, with package sizes now exceeding 100×100 mm², and roadmap announcements from TSMC and Intel indicate organic substrate formats extending up to more than 150×150 mm². At the same time, glass core substrates are gaining traction as a next-generation alternative to organic IC substrates. These offer superior dimensional stability, integration potential for optical waveguides, and compatibility with CPO architectures, positioning them as a promising solution for AI and HPC platforms in the second half of the decade.

The continuous progress of advanced packaging has also placed new demands on materials, lithography, and testing. The integration of HBM memory, TSVs, and chiplets requires materials with optimized dielectric properties, thermal management, and power delivery. Back-end lithography has become a critical enabler, with decreasing I/O pitches and extreme overlay accuracy needed to handle warped substrates, larger panels, and multilayer stacking in 2.5D, fan-out, hybrid bonding and other 3D stacking technologies. These advancements are shaping a new ecosystem where equipment, materials, and process innovation are essential to sustaining the integration density required by AI-driven architectures.