North America Advanced Packaging Market share was USD 3 billion in 2019 and is expected to grow at a CAGR of over 7%.
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The market growth is driven by the rising adoption of advanced technology, such as IoT and connected devices, in the region. Advanced packaging platforms enable miniaturization of devices and improve functionality, which will drive their demand among foundry suppliers and IDMs. The platforms also support to achieve low operational costs and high RF shielding with improved power dissipation, accelerating their demand across BTLE, Wi-Fi, and Zigbee applications. Foundry suppliers and semiconductor component manufacturers are extensively focusing on establishing new production facilities in North America. For example, in May 2020, TSMC announced an investment of around USD 12 billion for the construction of an advanced chip manufacturing facility in the State of Arizona, U.S. This new facility will utilize 5nm chip production technology. These new investments will accelerate the demand for advanced packaging platforms in the region.
The flip-chip type packaging segment accounted for the highest market share of 60% in 2019 and is projected to grow at a CAGR of over 5% by 2026. The packaging technology offers high input/output density and a smaller footprint, which increases its adoption in compact consumer electronic products. Advanced packaging with flip-chip technology helps to achieve high volume manufacturing with high thermal and electrical performance, which will boost its adoption in foundries. The rising adoption of advanced electronic gadgets and mobile devices will drive demand for flip-chip technology, adding an advantage for the advanced packaging industry in North America. According to the Federal Reserve Bank of St. Louis, 87% of the U.S. population owned mobile phones out of which 77% are smartphones, thus accelerating the demand for compact semiconductor components.
The automotive segment is anticipated to grow at a CAGR of 10% from 2020 to 2026. The growth is attributed to the growing demand for automotive electronics and development in vehicle safety systems. Adding to this, rising government initiatives toward the adoption of electric vehicles have propelled the adoption of advanced packaging chipsets for various electric and infotainment systems. According to the Global EV Outlook, in 2019, the electric vehicle stock in the U.S. was recorded to be 1.5 million compared to 1.1 million vehicles in 2018. The proliferation of electric vehicles in the region will drive the demand for power modules, sensors, and advanced chipsets, driving the market growth.
Canada accounted for a substantial market share in the North America market in 2019. The growth is attributed to favorable government initiatives to support the semiconductor and manufacturing industries in the region. For example, in November 2018, the United States-Mexico-Canada Agreement was introduced to modernize and approve free trade agreements, thus removes barriers and propels intellectual properties. These initiatives will accelerate production capabilities in foundries and semiconductor facilities, adding an opportunity for the North American industry.
Key players in the industry are Amkor Technology, Inc., Sanmina Corporation, JCET Group Co., Ltd., Powertech Technology, Inc., ASE Group, and Siliconware Precision Industries Co., Ltd., among others. These players are extensively focusing on product innovation and strategic collaborations to stay competitive in the market. For instance, in July 2019, Amkor Technology announced that the company will scale the adoption of 5G mmWave Antenna-in-Package (AiP) technology in its OSAT services. The new advanced packaging technology will help the company to foster the rising 5G chipsets demand in the industry.