AI Is Changing Chip Packaging, but Consumer Electronics Still Holds 48% of Market Revenue

Analyst view: AI is setting the pace for new packaging technologies, but it is not yet the largest application by revenue. Consumer electronics accounted for 48% of the market in 2025, while Asia-Pacific held 39%. That split points to a market with two different commercial clocks: high-volume demand from everyday devices and a fast-moving technology race around AI and high-performance computing.

DataM Intelligence estimates the global advanced chip packaging market at US$42.8 billion in 2025, with a forecast of US$79.6 billion by 2035 and a 6.4% CAGR from 2026 to 2035, as panel processing, chiplets and U.S. capacity expansion reshape supplier competition. The report identifies North America as the fastest-growing region and Asia-Pacific as the largest.

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Recent Developments:

- May 8, 2026 - ASE and WUS plan an AI packaging hub in Taiwan: The proposed Kaohsiung facility will support advanced packaging processes, including FOCoS and FC-BGA, for AI, cloud computing and autonomous-driving applications.

- May 20, 2026 - Broadcom joins Applied Materials' EPIC innovation platform: The partnership will focus on R&D for advanced packaging technologies used in next-generation AI chips and systems.

- May 26, 2026 - ASE introduces a 310 × 310 mm panel-level packaging line: ASE says the automated line is expected to enter production in the first half of 2027. Its larger format is designed to process more package area per panel than traditional wafer-based approaches.

- June 16, 2026 - TSMC and Amkor sign a 10-year U.S. partnership: The agreement establishes a framework for TSMC to procure advanced packaging and testing services from Amkor in Arizona.

- September 8, 2026 - Amkor expands its Arizona campus plan to US$12 billion: Phase 2 is expected to add 60,000 square meters of cleanroom space, taking planned campus capacity to about 93,000 square meters. Amkor said customer commitments had exceeded Phase 1's planned cleanroom capacity.

- October 1, 2026 - Applied Materials and Besi widen their collaboration: Their work now covers hybrid bonding, die-on-panel integration, 3D IC scaling and photonics-related interconnects for AI systems.

- October 21, 2026 - NVIDIA outlines supplier capacity expansions: The company said Amkor is targeting more than 300% growth in advanced packaging capacity by the end of 2028. It also cited a planned 2.5× increase in substrate capacity across three suppliers and a capacity-reservation advance to support new U.S. testing facilities at KYEC.

Regional Analysis:

United States:

U.S. expansion is increasingly being built around partnerships that connect wafer production, packaging and testing. TSMC's sourcing agreement with Amkor and Amkor's enlarged Arizona campus plan are concrete steps toward a domestic advanced-packaging chain. Intel's New Mexico facilities add another model: Intel says its packaging technology can support package sizes up to eight times the industry standard today, with plans to exceed 12 times by 2028.

Japan:

The opportunity extends beyond chip fabrication into package design, manufacturing and substrate supply. Japan's METI approved increased funding for Rapidus work on chiplet and package design and manufacturing for 2 nm-generation semiconductors. Separately, NVIDIA's October supply-chain announcement described an expansion at Ibiden's Ono plant, targeting three times its current capacity, with additional capacity expected to ramp from 2028. Together, these initiatives position Japan as a participant in both advanced packaging development and critical upstream materials.

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Analysis Segmentation

By Application:

Consumer electronics remained the largest segment, with 48% of market revenue in 2025. Its scale comes from high unit volumes across smartphones, laptops, tablets and wearables, where packaging helps fit more processing, memory and power-management functions into compact devices. AI and HPC are driving new package designs and investment, but their importance as technology catalysts should not be confused with a larger current revenue share.

By Packaging Technology:

The report covers flip-chip, wafer-level, 2.5D, 3D, system-in-package, embedded-die and chiplet-based packaging. Public market data does not specify revenue shares for each technology. Recent company announcements point to panel-level processing and hybrid bonding as active development areas, while TSMC's CoWoS roadmap reflects continuing demand for larger packages integrating compute and high-bandwidth memory.

By Region:

Asia-Pacific held 39% of the global market in 2025, supported by the concentration of foundries, outsourced semiconductor assembly and test providers, memory producers and packaging suppliers. North America is identified as the fastest-growing region, with Arizona and New Mexico investment illustrating the push to add capacity closer to U.S. chip and AI customers.

Company Profiles

- TSMC: Its 3DFabric portfolio includes CoWoS, InFO and SoIC technologies. TSMC says it certified a CoWoS solution for interposers 5.5 times mask/reticle size and planned volume production in 2026.

- ASE Technology Holding: ASE provides assembly and test services and develops advanced packaging and system-in-package solutions. Its 310 mm panel line is aimed at improving scale for heterogeneous integration and larger AI and HPC packages.

- Amkor Technology: Amkor provides outsourced packaging and test services, including advanced packaging, wafer-level processing and system-in-package. Its Arizona investment and TSMC partnership are expanding its U.S. role.

- Intel: Intel's packaging portfolio includes Foveros stacking and EMIB interconnects. Its New Mexico operations focus on combining chiplets into larger systems, with the company describing packaging as a way to scale beyond conventional reticle limits.

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