High-end performance packaging (HEPP), the 2.5D, 3D, ultra-high-density fan-out and hybrid-bonded packages used for AI accelerators, HPC processors and high-bandwidth memory, is the fastest-growing part of semiconductor packaging. This report, first published in June 2025, estimated the market at USD 7.8 billion in 2025, growing to USD 42.3 billion by 2030 at a 31.2% CAGR. Published forecasts differ by source and definition: Yole Group's July 2024 report projected USD 28.4 billion by 2029 (37% CAGR from USD 4.3 billion in 2023), and its 2026 edition projected more than USD 51 billion by 2031. All agree on the direction: AI demand and chiplet architectures are pushing advanced packaging to the centre of the industry.
Image: Yole Group, high-end performance packaging platforms, July 2024.
Key takeaways
- HEPP covers packages with very high I/O density and fine pitch: 2.5D and 3D integration, ultra-high-density fan-out, hybrid bonding and HBM stacks.
- Market forecasts vary widely by source, from about USD 28 billion in 2029 to over USD 42 billion in 2030 and over USD 51 billion in 2031. Treat any single number as one estimate.
- AI accelerators with HBM are the main driver. TSMC's CoWoS capacity has been a bottleneck for AI GPU supply.
- Asia-Pacific holds most capacity, with Taiwan leading; the US, Europe and India are adding capacity with public subsidies, but most new US packaging lines are not due until 2026 to 2028.
- The hard problems are cost, heat, yield of large multi-die packages and supply concentration.
Executive summary
The HEPP market sits at the meeting point of chiplet-based architectures, the AI boom and rising demand across high-performance computing (HPC), 5G networks, automotive electrification, the Internet of Things (IoT) and advanced consumer electronics.
This report, as published in June 2025, valued the market at USD 7.8 billion in 2025, up from USD 4.3 billion in 2023 (the 2023 figure matches Yole Group's published baseline), and projected growth to USD 42.3 billion by 2030, a compound annual growth rate (CAGR) of 31.2% from 2025 to 2030. The 2025 and 2030 figures are this report's estimates, not re-verified against a named primary source; see the comparison table below.
Growth is driven by advances in 2.5D/3D packaging, hybrid bonding, high-bandwidth memory (HBM) integration, and emerging technologies such as co-packaged optics and 3.5D architectures. Asia-Pacific holds over 65% of global revenue, while North America and Europe are growing through government subsidies, private investment and onshoring. Challenges include rising production costs, difficult thermal management, supply chain dependence and geopolitical risk; opportunities include cost-effective scaling, sustainability and new applications such as quantum computing, neuromorphic systems and space.
How the forecasts compare
| Source | Base year value | Forecast | CAGR |
|---|---|---|---|
| This report (June 2025) | USD 7.8 billion (2025) | USD 42.3 billion (2030) | 31.2% (2025-2030) |
| Yole Group, July 2024 | USD 4.3 billion (2023) | USD 28.4 billion (2029) | 37% (2023-2029) |
| Yole Group, 2026 edition | 2025 base, not quoted here | More than USD 51 billion (2031) | 27% (2025-2031) |
The differences come mainly from what each source counts as "high-end" and how it values HBM stacks and interposers. Compare growth rates and segment shares within one source rather than mixing sources.
Market overview
High-end performance packaging covers advanced packaging technologies built for very high input/output (I/O) density (about 16 I/Os per mm² or more), fine bump pitch (about 130 µm or less) and heterogeneous integration, following the definition used by Yole Group.
The family includes 2.5D and 3D integrated circuits (ICs), fan-out wafer-level packaging (FOWLP), ultra-high-density fan-out (UHD FO), system-in-package (SiP), and platform-specific solutions such as TSMC's chip-on-wafer-on-substrate (CoWoS) and ASE's fan-out chip-on-substrate (FOCoS).
HEPP goes beyond monolithic scaling by enabling multi-die integration, better thermal performance and energy efficiency, which makes it central to the industry's progress beyond Moore's Law. Applications include AI accelerators, 5G infrastructure, autonomous vehicles, medical devices, aerospace and quantum computing.
The main platforms at a glance
| Platform | How it connects dies | Typical use | Examples |
|---|---|---|---|
| 2.5D silicon interposer | Dies side by side on a silicon interposer with through-silicon vias (TSVs) | AI GPUs with HBM | TSMC CoWoS-S, Samsung I-Cube |
| 2.5D with bridges or RDL interposer | Small silicon bridges or redistribution layers instead of a full interposer | Large AI and server packages | Intel EMIB, TSMC CoWoS-L and CoWoS-R, ASE FOCoS-Bridge |
| 3D stacking (microbumps) | Dies stacked vertically with TSVs and microbumps | HBM memory stacks, logic on logic | HBM3E stacks, Intel Foveros |
| 3D hybrid bonding | Direct copper-to-copper bonds at single-digit-micron pitch | Cache stacking, next-generation HBM | TSMC SoIC, AMD 3D V-Cache, Intel Foveros Direct |
| UHD fan-out | Fine redistribution layers moulded around dies, no substrate core | Mobile application processors, networking | TSMC InFO, Amkor S-SWIFT |
Market size and forecast (this report's estimates)
- 2025 market size: USD 7.8 billion
- 2030 market size: USD 42.3 billion
- CAGR (2025-2030): 31.2%
- Unit growth: from 1.2 billion units in 2025 to 8.2 billion units by 2030 (CAGR 37.5%). For comparison, Yole's July 2024 report projected 5.6 billion units in 2029, up from 627 million in 2023.
- Revenue by packaging type: 2.5D/3D to contribute 52% by 2030; FOWLP to rise from 18% in 2025 to 22% by 2030.
Worked example: what a 31.2% CAGR means
Compound growth at 31.2% for five years multiplies the market by 1.312 to the power 5, about 3.89. Starting from USD 7.8 billion, that gives about USD 30 billion in 2030, not USD 42.3 billion. Reaching USD 42.3 billion from USD 7.8 billion in five years needs a CAGR of about 40%. One of the published figures in this report is therefore inconsistent with the others; the original numbers are kept above as published, and readers should use the growth rate and end value with care.
Key market drivers
Chiplet integration and heterogeneous architectures
Chiplets allow modular, high-bandwidth integration. Examples include Intel's Foveros and Foveros Direct, NVIDIA's Blackwell GPU (2024), which joins two large dies with a high-speed link on TSMC's CoWoS-L, and AMD's chiplet-based EPYC and Instinct products. The original report stated that Blackwell would move to 3 nm in 2026 and that EPYC 9000 used InFO_oS; both need correcting. Blackwell is built on TSMC's 4NP process, and NVIDIA's announced 3 nm generation is the next architecture, Rubin. AMD's EPYC processors use chiplets on an organic substrate, while its Instinct MI300 accelerators use CoWoS and SoIC. The report projected per-package bandwidths above 12 Tbps by 2030 and a 15% reduction in interconnect power from 2025 levels; these are forecasts.
AI and HPC demand
The explosion of AI workloads, with global data centre AI spending projected in the report to reach USD 150 billion by 2027, drives demand for HBM. On bandwidth, the original figures need updating: HBM3E stacks already reach about 1.2 TB/s per stack in products shipping since 2024, and the JEDEC HBM4 standard published in April 2025 supports about 2 TB/s per stack, with suppliers sampling HBM4 in 2025 for 2026 products, earlier than the 2029 date in the original. The report put telecom and infrastructure at a 68% revenue share in 2025 (Yole reported over 67% in 2023), while mobile and consumer grow fastest at a 52% CAGR, driven by AI smartphones, wearables and AR/VR devices.
Technological advances
Innovations in through-silicon vias (TSVs), microbumps and hybrid bonding are shrinking interconnect pitch. The report projected 5 µm pitch by 2028; hybrid bonding in production was already below 10 µm in 2024 (for example AMD's 3D V-Cache at about 9 µm), so single-digit pitches are on track. The report also projected data rates up to 20 Gbps per link and a 75% share for 3D stacked memory (HBM, 3D NAND, CBA DRAM) by 2030.
Miniaturisation and diversified applications
Demand for compact, high-performance devices in consumer electronics (foldable phones, AR glasses), automotive (ADAS, EV battery management), IoT (smart cities, industrial sensors) and medical (implantable devices) supports HEPP adoption. The report projected UHD FO multi-chip modules with over 1,000 I/Os per package by 2029.
5G, quantum and emerging technologies
5G rollout requires HEPP for base stations and small cells; the report cited 3 billion connections by 2027, a conservative figure given that Ericsson's Mobility Reports put 5G subscriptions above 2 billion by the end of 2024. In quantum computing, IBM's 1,121-qubit Condor processor was unveiled in December 2023, not 2025 as originally stated. The report also mentioned Intel's Loihi 3 neuromorphic chip in 2026; Intel had not announced Loihi 3 at the time of writing (its current chip is Loihi 2), so treat this as speculative. The report projected HEPP-based cryogenic packaging by 2030.
Government and industry initiatives
The US CHIPS and Science Act (about USD 52.7 billion, enacted in 2022, including USD 39 billion in manufacturing incentives), the EU Chips Act (aiming to mobilise more than EUR 43 billion of public and private investment by 2030) and the India Semiconductor Mission (₹76,000 crore, about USD 10 billion) support HEPP development through subsidies, tax incentives and public-private partnerships. Advanced packaging also has its own US programme, the National Advanced Packaging Manufacturing Program.
Market challenges
- High production costs: advanced processes including TSVs and hybrid bonding are reported to cost 30-40% more than traditional packaging, with capital expenditure for new facilities projected to exceed USD 20 billion by 2028.
- Thermal management: 3D ICs can generate heat fluxes up to around 200 W/cm² in hot spots, pushing the industry towards microchannel liquid cooling and phase-change materials, projected by 2027.
- Supply chain vulnerabilities: heavy dependence on Asia-Pacific, put at 70% of foundry capacity in 2025 in the report (other estimates are higher), and geopolitical tension such as US-China trade restrictions create what the report estimated as a 15-20% disruption risk by 2029.
- Skill shortages: the report projected a 30% gap in skilled engineers by 2030, requiring large training programmes.
Market opportunities
- Cost-effective scaling: chiplets and panel-level packaging (PLP) are projected to reduce packaging costs by 15-25%, with PLP growing at a 28% CAGR (2025-2030) and organic interposers cutting substrate costs by 18% by 2029.
- Regional expansion: onshoring in North America and fab clusters in Europe (for example Dresden) aim for 25% self-sufficiency by 2030. The original cited Intel's Ohio fab for 2026; Intel announced in early 2025 that the first Ohio fab would not be completed until around 2030.
- Co-packaged optics: integrating photonics with HEPP, projected to reach 12% market share by 2030, raises data centre bandwidth (the report cited up to 800 Gbps per lane).
- Sustainability: lead-free solders, recyclable substrates and carbon-neutral processes support ESG goals, with 40% of firms reported to be targeting net zero by 2030.
- Space and defence: HEPP for radiation-hardened chips and CubeSat payloads is an emerging niche, projected at a 20% CAGR through 2030.
Market segmentation (this report's estimates)
By technology
| Technology | Share 2025 | Share 2030 | Notes |
|---|---|---|---|
| 2.5D/3D packaging | 50% | 52% | Driven by HBM and chiplets; 3D ICs at 40% CAGR |
| Fan-out wafer-level packaging (FOWLP) | 18% | 22% | UHD FO for AI/HPC at 35% CAGR |
| System-in-package (SiP) | 15% | 18% | Led by wearables and medical devices |
| Emerging (3.5D, co-packaged optics) | 7% | 10% |
The 2030 shares in the original add up to 102%, so at least one is slightly overstated; they are kept as published.
By end use
| End use | Share or growth | Driver |
|---|---|---|
| Telecom and infrastructure | 68% revenue share in 2025, rising to 70% by 2030 | AI servers and 5G |
| Mobile and consumer | 52% CAGR | AI devices and AR/VR (the report cited an Apple Vision Pro 2 in 2027, which is speculative) |
| Automotive | 21% CAGR | ADAS (the report assumed Level 5 by 2029, which is speculative) and EV powertrains |
| Industrial and IoT | 15% CAGR | Smart manufacturing and edge AI |
| Aerospace and defence | 5% CAGR | Space exploration and secure communications |
| Medical | 4% CAGR | Implantable and diagnostic devices |
By region
- Asia-Pacific: 65% share in 2025 with a 32% CAGR, led by Taiwan, South Korea and China (the report cited 60% growth for SMIC in 2025, not re-verified). The original attributed TSMC's USD 65 billion investment (2025-2028) to Taiwan; USD 65 billion was TSMC's April 2024 commitment for Arizona, raised to USD 165 billion in March 2025.
- North America: projected to reach USD 9.2 billion by 2030 at a 26% CAGR, driven by Intel, AMD and the CHIPS Act.
- Europe: 13% CAGR, supported by Infineon's Dresden fab (Infineon targets production start in 2026; the report said 2027) and Italian funding, reported at EUR 1.4 billion in 2025.
- Rest of world: India (14% CAGR, with Micron's Gujarat assembly and test plant), Brazil (10% CAGR) and the Middle East (5% CAGR).
Key companies
Key players
- TSMC: put at 45% market share in the report, with CoWoS (S, R and L variants), InFO and SoIC 3D stacking, targeting AI and HPC with its 2 nm generation, which entered volume production in late 2025.
- Intel: develops Foveros, Foveros Direct, EMIB and hybrid bonding. Its Arizona Fab 52 began 18A production in 2025; the Ohio site has been delayed to around 2030. Intel also has advanced packaging operations in Penang, Malaysia.
- Samsung: offers I-Cube (2.5D) and X-Cube (3D) packaging, with H-Cube for large substrates. I-Cube4 was announced in 2021; the original described it as a 2024 launch.
- ASE Group: offers FOCoS, FOCoS-Bridge and its VIPack platform, and has expanded in Penang, Malaysia, where it opened its fifth plant in early 2025. The original credited ASE with S-SWIFT and S-Connect, which are Amkor technologies.
- Amkor Technology: strengthens UHD fan-out (S-SWIFT, S-Connect) and test, and is building an advanced packaging campus in Peoria, Arizona, with production targeted for around 2028, plus R&D in South Korea.
- Others: products that depend on HEPP include NVIDIA Grace Hopper (2023), Broadcom Tomahawk 5 (2022), Huawei's Ascend 910 series (an Ascend 910D was reported in 2025) and Qualcomm Snapdragon X Elite (2024). The original gave later dates for several of these.
Recent developments, as listed in the original report
| Date given | Development as listed | Note |
|---|---|---|
| June 2025 | TSMC increases CoWoS capacity by 40% for AI GPUs | TSMC has been expanding CoWoS capacity rapidly; the exact 40% figure is not re-verified |
| March 2025 | Intel launches Foveros Direct in Ohio | Incorrect location: the Ohio fab is not operating. Foveros Direct is planned with Intel's 18A-generation products |
| January 2025 | ASE introduces S-SWIFT for HPC chiplets | S-SWIFT is an Amkor technology, introduced several years earlier |
| October 2024 | Samsung unveils I-Cube4 for HBM3E | I-Cube4 was announced in 2021 |
| July 2025 | Amkor opens Arizona UHD FO line | Not correct: Amkor's Arizona plant was under construction, with production targeted around 2028. This date was also after the report's June 2025 publication |
Regional analysis
- Asia-Pacific: leadership reinforced by Taiwan's expansion, China's reported 60% OSAT growth in 2025 and South Korea's projected 25% capacity addition by 2027.
- North America: the CHIPS Act supports the projected 26% CAGR, with TSMC Arizona (first fab in volume production since late 2024) adding output. The original listed Intel's Penang facility under North America; Penang is in Malaysia.
- Europe: Germany's ERS electronic GmbH, a supplier of thermal test and wafer handling equipment, was reported to open a thermal management centre in 2025. The original also listed Soitec expanding FOWLP in 2028; Soitec is best known for engineered substrates such as SOI, so this item needs checking.
- India: Micron's Gujarat assembly and test plant and Tata's Assam assembly and test plant, both under construction in 2025, support a projected 14% CAGR.
- Middle East: NEOM's smart city projects and the UAE's Masdar City initiatives were cited as drivers of a 5% CAGR.
Future outlook
- AI and HPC leadership: HBM4 (about 2 TB/s per stack, products from 2026) and 3.5D packaging will dominate, with hybrid bonding pitches projected to reach 3 µm by 2030.
- PLP and cost reduction: organic interposers and UHD FO are projected to cut costs by 20-25% and reach 15% market share by 2030.
- Emerging applications: AR/VR (the report cited Meta Horizon OS 3 in 2028, speculative), autonomous vehicles, quantum chips with 1,000+ qubits (already demonstrated by IBM Condor in 2023) and space payloads.
- Sustainability: 50% of firms are reported to target carbon-neutral packaging by 2030, with recyclable materials reducing waste by 30%.
- Regulation: the EU Green Deal and US EPA rules are expected to push eco-friendly processes, which the report projected as mandatory by 2027.
Common mistakes when reading packaging market reports
- Mixing figures from different firms that define "advanced" or "high-end" packaging differently.
- Not checking that the base value, end value and CAGR actually agree (as the worked example above shows, they sometimes do not).
- Treating announced capacity or plant dates as production dates. Packaging plants often slip by one to three years.
- Counting HBM revenue in both the memory market and the packaging market.
Conclusion
HEPP is a catalyst for the semiconductor industry's next decade, enabling AI, 5G expansion and emerging technologies through chiplet integration and advanced packaging. Whether the market reaches USD 28 billion in 2029, USD 42 billion in 2030 or more than USD 51 billion in 2031, it is set to grow several times over within the decade. Overcoming cost, thermal and supply chain challenges through R&D, partnerships and sustainable practice will decide who leads.
FAQ
What is high-end performance packaging?
Advanced packaging with very high I/O density and fine interconnect pitch, used to join multiple dies or stack memory: 2.5D interposers, 3D stacking, hybrid bonding and ultra-high-density fan-out.
Why do market forecasts differ so much?
Each analyst defines the market differently, values HBM and interposers differently and uses a different base year. Compare growth trends within one source.
Who leads the HEPP market?
TSMC leads, mainly through CoWoS and SoIC for AI accelerators, followed by Intel, Samsung and the OSATs ASE and Amkor.
What is the biggest bottleneck?
For AI accelerators in 2024 and 2025, CoWoS-class 2.5D capacity and HBM supply were the main constraints, followed by thermal limits on very large packages.
Sources
- Yole Group, High-End Performance Packaging 2024 (July 2024) and 2025 and 2026 editions
- Market.us, Chiplet Packaging and Testing Technology Market Report
- Grand View Research, Advanced Packaging Market Report
- Future Market Insights, High-End Performance Packaging Market Report
- Allied Market Research, Advanced Packaging Market Report
- Semiconductor Industry Association, 2025 Global Market Trends
- JEDEC, JESD270-4 HBM4 standard, April 2025
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