Global Fan-Out Packaging Market Predicted to Double in Size by 2028, Led by Dominant Player TSMC

The FO (Fan-Out) market is an advanced packaging technology that is expected to show robust growth in the next five years. With the increasing demand across industries such as HPC and networking, the market size is expected to double in the next five years. It has been observed that the major foundry company TSMC plays a dominant role in the FO market.

According to market research firm Yole Intelligence, the FO market is expected to grow from $1.86 billion in 2022 to $3.8 billion in 2028. Fan-Out is a next-generation packaging technology that can extract the I/O terminal wiring from the chip. It can place more I/O terminals externally, reducing the wiring length between the semiconductor and the motherboard, thereby achieving higher electrical performance and thermal efficiency. Consequently, major semiconductor and packaging companies are accelerating the development of related technologies such as UHD FO (Ultra High Density Fan-Out), FO-WLP (Fan-Out Wafer-Level Packaging), and FO-PLP (Fan-Out Panel-Level Packaging).

The FO market reached $1.86 billion in 2022 and is expected to double in size by 2028, with a compound annual growth rate of 12.5%. The UHD FO area is expected to grow the fastest, with a CAGR of 30%. Yole Intelligence states that "the demand for UHD FO is increasing across various fields such as HPC (High Performance Computing) and networking, leading to the growth of the market."

The steadily growing FO market is led by the world's top foundry company, TSMC, with a market share of 76.7% as of last year. In addition, the combined market share of the three major OSAT (Outsourced Semiconductor Assembly and Test) companies, ASE, Amkor, and JCET, will exceed 90%.

TSMC was also one of the first companies in the industry to develop and explore the FO market. It developed the FO-WLP technology "InFO (Integrated Fan Out)" and began introducing it to Apple's AP (application processor), which was previously monopolized by Samsung Electronics. Since 2016, TSMC has successfully secured all orders.

Samsung Electronics also developed its own FO-PLP technology when TSMC was aggressively introducing fan-out technology. Compared to FO-WLP, which is based on rectangular panels wider than wafers, FO-PLP has the advantage of improving packaging productivity. However, according to assessments, due to its high technical difficulty, it is difficult to ensure stable yield.

Yole Intelligence states that "there are still technical issues with FO-PLP in achieving cost efficiency. If the shipment volume of FO-WLP is 2.38 million pieces on 300mm wafers in 2028, FO-PLP will be at the level of 240,000 pieces."