Analysts Say
The semiconductor back-end process market is expanding due to the growing demand for future vehicles such as electric vehicles and self-driving cars, but some experts say that Korea needs to boost its competitiveness in the back-end process market.
The semiconductor back-end process market is expected to grow at a compound annual growth rate of 4.8 percent from 2022 to 2028, reaching US$50.9 billion (about 68.1 trillion won) in 2028, according to market research firm Zion Market Research on May 16.
The semiconductor manufacturing process is divided into front- and back-end processes. Designing a semiconductor chip and engraving it on a wafer is the front-end process, while, in the back-end process, a chipmaker cuts a chip and wraps it in insulation to protect it from external shocks and wires it for stable power supply. Packaging, which connects different types of semiconductors to create a system semiconductor, is also part of the back-end process.
Zion Market Research analyzed that back-end processes have become more important with the rise of electric vehicles and autonomous vehicles. Packaging to improve the performances of semiconductors in these vehicles and testing them to verify their safety have become more significant, it said.
The semiconductor back-end process industry is led by Taiwanese and Chinese companies. According to market research firm Yole Development, Taiwan’s ASE was the No. 1 semiconductor back-end processing company by revenue in 2021, followed by Amkor in the United States and JCET in China. No Korean companies made the top 10.
While Samsung Electronics and SK hynix are leading the world in memory semiconductors, the overall Korean semiconductor ecosystem is not strong. Accordingly, Samsung Electronics and SK hynix have been strengthening their packaging business capabilities.
Samsung Electronics has been investing in its Cheonan packaging line to dial up its production capacity in Korea since the beginning of this year. Samsung’s DS division launched an advanced package team by way of its reorganization.
Samsung currently has two-and-a-half-dimensional (2.5D) package technology, which places logic semiconductors and high bandwidth memory (HBM) on flat plates, and 3D (x-cube) package technology, which places static RAM or SRAM on logic integrated circuits made via an extreme ultraviolet (EUV) process.
SK hynix is also contemplating building a US$15 billion packaging manufacturing facility in the United States. The construction of this line is expected to accelerate once subsidy negotiations with the U.S. government are finalized.