Over the past decade, the Chinese market for packaging and assembly has grown concurrently with the electronic product manufacturing boom inside the region. So much so, this year total packaging material sales are expected to reach $4.4 billion, second only to Southeast Asia as the biggest region in the world, according to findings from the trade group SEMI.
Of the majority of packaging and assembly-related companies, most are concentrated in the Yangtze River Delta covering Jiangsu, Shanghai and Zhejiang provinces and the Pearl River Delta area of Guangdong province. According to the SEMI findings, 65 percent of all packaging companies are located in Jiangsu, Guangdong and Shanghai. SEMI observed a total of 147 packaging companies across the region.
Chinese packaging firms are concentrated in the Yangtze River Delta and Pearl River Delta regions. Source: SEMI Such a large base of packaging and assembly vendors—including those for discrete, power and light-emitting diodes (LED)—results in China being the largest regional market consuming packaging equipment. SEMI forecasted $800 million worth of equipment being sold in 2015 with a similar figure estimated for this year. This also leads to China being the second-largest market globally for total packaging materials—second only to Southeast Asia.
In recent guidelines established by the Chinese government aimed at addressing development targets, approaches and measures for advancing the capabilities and the standing of Chinese companies in the global chip industry, IC packaging and testing is required to achieve world-class levels by 2020.
As a result, the three leading chip package subcontractors in China—Jiangsu Changjiang Electronics Technology, Nantong Fujitsu and Tianshui Huatian—are all developing advanced processes and increasing capabilities to serve both China and overseas companies, SEMI says. Furthering this trend, domestic packaging subcontractors are turning to global outsourcing to save on costs, and these same packaging firms have been active in mergers and acquisitions in order to meet these guidelines set by the government.
To learn more about SEMI’s findings on packaging and assembly in China, see SEMI’s recent report entitled: “China Semiconductor Packaging Market Outlook.”
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