Organic Substrate Packaging Material Market Size, Share, and Trends 2024 to 2033

Organic Substrate Packaging Material Market Size and Growth

The global organic substrate packaging material market size was USD 15.27 billion in 2023, calculated at USD 15.86 billion in 2024 and is expected to reach around USD 22.26 billion by 2033, expanding at a CAGR of 3.84% from 2024 to 2033. A significant rise in the demand for portable electronic devices, in addition to the advancements in information and communication technology is the organic substrate packaging material market driver.

Organic Substrate Packaging Material Market Key Takeaways

• Asia Pacific dominated the organic substrate packaging material market with the largest revenue share of 67% in 2023.
• North America is projected to show the fastest growth in the market over the forecast period.
• By application, the consumer electronics segment dominated the market in 2023.
• By application, the automotive segment is expected to grow at the highest CAGR in the market during the forecast period.
• By technology, the SO packages segment held a significant share of the market in 2023.

Asia Pacific Organic Substrate Packaging Material Market Size and Growth 2024 to 2033

The Asia Pacific organic substrate packaging material market size was valued at USD 10.38 billion in 2023 and is expected to be worth around USD 15.25 billion by 2033, at a CAGR of 3.92% from 2024 to 2033.

Asia Pacific dominated the organic substrate packaging material market in 2023. Market growth in the Asia Pacific is primarily driven by the rising adoption of smartphones, the increasing number of Internet users, and the introduction of new features and technologies that attract new customers and expand footprints in emerging markets. Also, the region's leading position in the global printed circuit board market supports the growth of organic substrate PCBs. Major global packaging substrate manufacturers are primarily located in Taiwan, South Korea, and Japan.

• In February 2023, LG Innotek introduced a 2-metal chip on film (COF), a crucial component for XR devices, which garnered significant interest from visitors at LG Innotek's metaverse zone. This semiconductor package substrate connects flexible PCBs and displays, helping to reduce the form factor of modules and minimize display bezels on devices such as smartphones, notebook computers, televisions, and monitors.
• In January 2022, Simmtech, a South Korean manufacturer of PCBs and semiconductor packaging substrates, announced the near completion of its first large-scale PCB manufacturing facility located on an 18-acre site in Penang, Malaysia. This facility complements Simmtech's existing PCB operations in Southeast Asia, particularly in South Korea, Japan, and China.

North America is projected to show the fastest growth in the organic substrate packaging material market over the forecast period. The rising demand for biodegradable and compostable packaging materials in the region can be attributed to the expanding food and beverage industry. Furthermore, advancements in packaging technology, including flat no-lead packages, quad-flat packages (QFP), dual in-line packages (DIP), small outline (SO) packages, and grid arrays (GA) packages, have further driven market growth in the region.

• In June 2023, U.S. chipmaker Micron Technology is set to launch its semiconductor assembly and test facility in Gujarat, with plans to commence production as early as 2024. This development will significantly bolster India's chip-making aspirations. The primary focus of the plant will be packaging chips, where it will convert wafers into ball grid array integrated circuit packages, memory modules, and solid-state drives.

Market Overview

Organic substrate packaging materials are used as the base layer for printed circuit boards (PCBs) to ensure high reliability and excellent electrical performance. These materials reduce the weight of PCBs, enhance their functionality, and improve dimensional control. They also help to minimize the environmental impact compared to inorganic alternatives. As a result, the global demand for organic substrate packaging materials is rising. China, the world's largest smartphone market, is expected to continue seeing high smartphone sales, particularly from domestic companies like OPPO and VIVO, which benefit from significant cost advantages over international competitors.

Organic Substrate Packaging Material Market Growth Factors

• The rising popularity of miniature electronic devices in the defense and military is expected to drive the organic substrate packaging material market growth.
• The growing semiconductor industry, along with the increasing demand for improved electric motors in industrial equipment, can fuel the organic substrate packaging material market.
• The rising global demand for consumer electronics and smart devices is projected to drive growth in the global organic substrate packaging material market through the forecast period.

Organic Substrate Packaging Material Market Scope

Organic Substrate Packaging Material Market Dynamics

Driver

Rising demand for sustainability

Governments and regulatory bodies worldwide are implementing stricter regulations and policies to reduce plastic waste and promote sustainable packaging. These regulations support the adoption of the organic substrate packaging material market. Increasing environmental awareness among consumers is driving demand for sustainable products, including packaging materials. Consumers are more inclined to choose products with eco-friendly packaging, creating a market for organic substrates. Organic substrate packaging materials, such as those made from plant-based fibers, are biodegradable and compostable. This reduces environmental pollution and waste accumulation, addressing the growing concern over plastic pollution.

Advancements in electronic packaging technologies

The organic substrate packaging material market is growing significantly due to advancements in electronic packaging technologies and the increasing demand for compact, lightweight electronic devices. Materials like fiberglass-reinforced epoxy laminate (FR4) and polyimide are becoming popular for their excellent electrical insulation and mechanical strength. Moreover, the trend toward miniaturization in consumer electronics and the automotive sector can drive market expansion soon.

• In September 2023, Intel announced one of the industry’s first glass substrates for next-generation advanced packaging, planned for the latter part of this decade. This breakthrough achievement will enable the continued scaling of transistors in a package and advance Moore’s Law to deliver data-centric applications.

Restraint

Complexity of the manufacturing process

The organic substrate packaging material market growth is limited by challenges such as the high costs of advanced organic substrates and the complexity of manufacturing processes. Additionally, stringent regulatory requirements regarding material safety and environmental impact can create further obstacles for market players. However, the ongoing research and development efforts aimed at improving substrate performance and reducing production costs can impact the market positively.

Opportunity

Rising government initiatives

Governments worldwide are increasingly implementing stricter environmental regulations to reduce plastic waste and promotes the organic substrate packaging material market. This creates a favorable environment for organic substrate packaging materials, which are biodegradable and eco-friendly, as businesses seek alternatives to comply with these regulations.

Many governments offer financial incentives, subsidies, and grants to companies that develop and use sustainable packaging materials. These incentives lower the cost barrier for businesses to transition to organic substrates, boosting demand and innovation in the market. Government agencies and departments are increasingly adopting green procurement policies, requiring suppliers to use sustainable packaging materials. These policies create a direct organic substrate packaging material market within the public sector and set a precedent for private companies to follow.

Application insight

The consumer electronics segment dominated the organic substrate packaging material market in 2023. Factors driving growth in the consumer electronics segment, an important market for semiconductors, include the rising adoption of wearable and smart products, the expanded smartphone market, and the increasing prevalence of consumer IoT devices used in applications such as home monitoring. Furthermore, Chip manufacturers anticipate significant global popularity of high silicon 5G smartphones in the forecast period, which can potentially improve the organic substrate packaging material market.

TOP 10 ELECTRONICS MANUFACTURERS BY COUNTRY IN 2022-2023 IN USD BILLION)

The automotive segment is expected to grow at the highest CAGR in the organic substrate packaging material market during the forecast period. Automotive electronics generate significant amounts of heat. Organic substrates, particularly those with high thermal conductivity, are crucial for effective thermal management, ensuring the longevity and reliability of electronic components under the harsh conditions often found in automotive environments.

Technology insight

The SO packages segment held a significant share of the organic substrate packaging material market in 2023. By integrating multiple functions into a single package, SO packages can reduce the overall cost of assembly and testing. This cost efficiency makes them attractive for high-volume consumer electronics and other applications where cost competitiveness is crucial. SO packages enable the integration of multiple electronic components, such as processors, memory chips, and passive components, into a single package. This integration supports the trend towards miniaturization in electronic devices, which is critical for applications like smartphones, wearables, and IoT devices.

Organic Substrate Packaging Material Market Companies

• Amkor Technology Inc.
• ASE Kaohsiung (Advanced Semiconductor Engineering Inc.)
• Compass Technology Co. Ltd.
• Hitachi Chemical Company Ltd. (Hitachi and Showa Denko)
• Kyocera Corporation
• Mitsubishi Corporation
• NGK Spark Plug Co. Ltd.
• Shinko Electric Industries Co. Ltd. (Fujitsu)
• STATS ChipPAC Pte. Ltd. (Jiangsu Changjiang Electronics Tech. Co.)
• WUS Printed Circuit Co. Ltd.

Recent Developments

• In July 2023, Samsung Electronics initiated mass production of flip-chip ball grid array (FC-BGA) in its factory in Thai Nguyen province, northern Vietnam.
• In February 2023, LG Innotek announced its intention to commence production of flip-chip ball grid array (FC-BGA) components in October of the same year. LG Innotek is projected to achieve a monthly FC.
• In September 2022, Onsemi introduced a series of silicon carbide-based power modules utilizing transfer molded technology. These modules are designed for use in onboard charging and high-voltage (HV) DCDC conversion in electric vehicles. 

Segments Covered in the Report

By Application

• Consumer Electronics
• Automotive
• Manufacturing
• Healthcare
• Others

By Technology

• SO packages
• GA packages
• Flat no-leads packages
• Others

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa