Silicone-free Underfill Materials for Next-gen High-reliability Electronics Applications to Drive Market

Most successful semiconductor and electronics producers have established their business in countries of Asia Pacific. Hence, companies in the underfill market are now exploring untapped opportunities in North America and Europe to broaden their scope for new revenue streams. On the other hand, manufacturers are increasing their focus on next-gen high-reliability electronics applications. For instance, in April 2019, leading chemical and consumer goods company Henkel AG announced the launch of its new silicone-free underfill material that can be used in electric vehicles (EVs). The growing adoption of electric vehicles and the ever-increasing automotive industry are generating incremental opportunities for manufacturers in the underfill market.

Moreover, leading players are collaborating with online distribution platforms to increase the uptake of underfill materials. Uniform and void-free encapsulating underfill are being highly publicized to maximize a device’s temperature cycling capability. Manufacturers are increasing R&D to develop fast curing underfill that provide essential interconnect protection from shock, drop or vibration.

underfill market infographic

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Companies Innovate in Underfill Materials to Protect Fine-pitch Array Devices

Innovative underfill materials are helping companies to gain global recognition. As such, top five players continue to account for ~70-75% of the underfill market. Leading players are increasingly participating in trade events to tie up with potential partners. Companies in the underfill market are initiatives to deliver products that are reliable, prioritize sustainability, and enhance the performance of next-gen electronic devices and systems. Manufacturers are working closely with practicing engineers that are capable of developing cost-effective and innovative underfill materials.

Moreover, manufacturers are increasing their research efforts to develop underfill materials that offer reliable device protection, even in challenging conditions. They are increasing their production capabilities to develop underfill that protects fine-pitch array devices with the help of highly filled formulations that adapt to exceptionally advanced glass transition temperatures.

Customization Options for Embedded Systems Cater to Convenience of End-use Stakeholders

The demand for embedded systems is projected to grow in the coming years. This trend has led to the demand for compact-sized components, unmatched reliability, and their ability to withstand harsh conditions. All these factors contribute to the growth of the underfill market, which is expected to reach a revenue of ~US$ 600 Mn by the end of 2027.

Manufacturers in the underfill market are offering various options to its stakeholders to increase the reliability of their final-product embedded systems. For instance, Transcend Information, Inc.— a leading manufacturer of industrial-grade products, is offering corner bond and underfill materials to stakeholders dealing in embedded products to enhance the product’s reliability under high vibratory stress or high gravitational acceleration.

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Ongoing investments in developing cutting-edge technologies and innovations in embedded-use flash and DRAM products are generating revenue streams for manufacturers. Underfill materials are being pervasively used in ball grid array-based storage such as in handheld devices that must pass drop or tumble tests. This is evident since ball grid array application segment is estimated to account for the third-highest revenue in the market for underfill.

Reasonable TCB Costing to Fuel Proliferation of IoT in 5G Applications

Companies in the underfill market are tapping into incremental opportunities to develop pre-applied underfill materials that support collective bonding processes. This trend has led to exponential growth of the underfill market, which is anticipated to reach an output of ~1,180 tons by the end of 2027.

However, proliferation of IoT in various 5G applications leads to barriers in semiconductor packaging technologies. For instance, the flip chip bonding technology is required for the development of ultrafine-pitch products such as graphic, network, and AI processors. In order to achieve this, companies are adopting thermal compression bonding (TCB) with the help of pre-applied underfill materials. However, the scarcity of underfill materials such as nonconductive paste or nonconductive film has led to high process cost. Hence, there is a need for reasonable TCB costing to support the expansion of IoT in 5G applications. There is a growing need to maximize the production of underfill materials to support multiple die bonding processes.

underfill market segmentation

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Analysts’ Viewpoint

The underfill market is estimated to expand at a CAGR of ~9% during the forecast period. Apart from Asia Pacific and North America, companies are exploring untapped opportunities in Latin America and Middle East & Africa to broaden their scope of future revenue opportunities.

Multiple die bonding processes are boosting the proliferation of IoT in 5G applications. However, conventional underfill materials pose difficulty in multiple bonding processes due to a mismatch between reactivities of materials. Hence, manufacturers should innovate in new underfill materials such as nonconductive paste or nonconductive films that offer thermal stability and electrical insulation. They should explore opportunities in high-performance electronics applications for aerospace and automotive sectors.

Underfill Market: Overview

  • According to Transparency Market Research’s latest market report on the underfill market for the historical period of 2014-2018 and forecast period of 2019-2027, growing demand for low cost, high performing, and compact devices are some of the factors boosting the growth of the global underfill market. Globally, the underfill market is estimated at ~US$ 340 Mn in 2019, and is projected to register a CAGR of ~9% during the forecast period of 2019-2027.

Rising Preference for High Performance & Compact Electronic Devices to Propel Market Growth

  • The demand for portable electronic equipment is growing at an exponential rate across the globe, particularly in developing countries. Companies seek compact components for their electronic products, which can be achieved through the application of underfill materials that provide strength and increased impact resistance. Use of underfill materials also boosts thermal cycling resistance and improves overall reliability of products.
  • In the electronics industry, the preference for products with high functionality boosts the sales of smartphones, laptops, and tablets. The use of underfill materials becomes crucial in order to achieve reliability, and reduce the overall size of electronic products. On the back of these factors, the underfill market is anticipated to witness substantial growth over the forecast period.

Increasing Demand for Portable Systems in Aerospace and Military

  • The growing use of electronics in aerospace and military is anticipated to contribute considerably to the demand for underfill materials during the forecast period. High reliability, along with the ability to withstand thermal stress further increases the applications of underfill materials in this sector.
  • Rise in applications of electronic components in automobiles has increased the demand for underfill materials. Underfill materials are primarily used to enhance the solder joint reliability and thermal cycling board level reliability of automobile electronics.
  • Moreover, high usage of underfill material for wafer level packaging and flip chip packaging, attributable to the rising demand for these packaging solutions from manufacturers of electronic gadgets is anticipated to bolster growth of the underfill market over the forecast period

Growing Adoption of Flip Chip Underfill Materials to Boost Sales

  • Underfill material has changed the scenario for the flip chip technology as well as the landscape of the entire semiconductor industry by dispensing thermal-induced stress, as underfill directly attaches a silicon chip to low-cost organic materials. On the back of this factor, the flip chip packaged unit is projected to exhibit an above average growth during the forecast period. This, in turn, creates a significant demand for underfill materials.
  • Several manufacturers of high-end devices are transitioning from the use of wire bond to flip chip bonding, primarily due to the added advantage offered by flip chip bonding that includes board area reduction up to 95%, high speed electrical performance, more durable interconnection, and lower cost for high volume production. This is expected to positively impact the sales volume of the underfill market in the foreseeable future.

Focus on Cost-effective Underfill Materials

  • The packaging industry is undergoing a transition with the use of wafer level and more cost-effective underfill by combining the processes into one or two steps to reduce the cost of production, attributable to the considerable pricing pressure on suppliers. Underfill material manufacturers such as NAMICS Corporation are making small changes in material properties by 1 to 2 degrees to make these offerings more customized. However, there are no new innovations taking place in the conventional underfill market.

Copper Pillars Gaining Traction

  • Demand for miniaturized electronic devices with high functionality leading to a shift to use of the flip chip technology boosts the growth of the underfill market. In order to cope with this shift, copper pillars are increasingly being employed, attributable to their pliancy for ultra-fine pitches and superior electrical connections. This is expected to positively impact the sales of underfill materials, as these provide the strength required in such tight dimensions.
  • The adoption of copper pillars is increasing, as manufacturers are deploying the new interconnect structure to exploit technological and cost advantages

Market Players Facing Downward Pricing Pressure with Sizable R&D Cost

  • The profit margins for underfill suppliers are reducing, as end users seek low-cost packaging solutions. Manufacturers in the semiconductor industry prefer use of cost-effective materials, which puts pressure on suppliers to reduce the cost of their packaging solutions targeted at the electronics and semiconductors industries.
  • Companies across the supply chain need to collaborate with each other to maintain the momentum of this new development in the underfill market, and to supply products at lower cost. In this industry, competition is high, and a large portion of the underfill market is dominated by a few companies. Yet, new suppliers are entering the underfill market, and they face intense pricing pressure from end users. However, companies are reluctant to spend money on the development of new processes or on innovation, which is a time consuming process.

Underfill Market: Competition Landscape

  • A transition from a fragmented market towards a more consolidated one due to limited industry growth is taking place. Moreover, the demand for low-cost electronics has reshaped the material supplier topography. Companies such as Samsung and Intel are controlling the wafer market, and are trying to exert more control. These companies are also developing chips and are opting for consolidation in the chip industry. Therefore, the packaging industry has to follow the aforementioned trend, which is also be applicable to companies in the underfill market. Margins are shrinking, and in order to remain competitive, companies are consolidating with an aim to provide solutions in higher volumes.

Underfill Market - Scope of the Report

Transparency Market Research (TMR) published a new report on the global underfill market, providing forecast for the period of 2019-2027. As per TMR’s study, substantial growth opportunities for players in the underfill market are expected, attributable to the increasing demand from manufacturers of compact electronics gadgets. The report provides valuable insights, which enables readers to make winning business decisions for the future growth of their businesses. The report highlights significant factors that are constantly determining the growth of the underfill market, untapped opportunities for manufacturers, trends and developments, and other insights across various key segments. Macroeconomic factors that are directly or indirectly affecting the growth of the market are also incorporated in the report.

Key Questions Answered in TMR’s Underfill Market Report

  • What will be the market size for underfill by the end of 2025?
  • Which material is expected to be most preferred for underfill? What was its market size in 2019?
  • Which region will remain the most lucrative in the underfill market?
  • Who are major players in the underfill industry?

Key indicators associated with the underfill market have been calculated thoroughly in the report. Vital market dynamics, such as key drivers, challenges, and trends, along with opportunities in the global underfill market are also included. A comprehensive study on the supply chain, which includes key players and end users have been incorporated in the global underfill market report. Other key aspects laid down in the market report include pricing strategy of leading market players, and comparative analysis of market. Forecast factors and forecast scenarios of the underfill market have been covered in the report to enable readers to understand the future prospects of the market.

A comprehensive evaluation and forecast on the underfill market is provided on the basis of material, application, & region.

The Y-o-Y growth comparison, volume and revenue comparison, and market share comparison of various market segments are provided in the report. The underfill market is analyzed at both regional and country levels.

The report delivers an exhaustive assessment on the structure of the underfill market, in tandem with a dashboard view of all leading company profiles in the report. Every company’s share analysis on market players has also been presented in the report, apart from the footprint matrix of the profiled market players. The report depicts the presence of underfill manufacturers by leveraging an intensity map. It also highlights key end users for underfill.

Key companies profiled in the underfill market report include Henkel AG & Co. KGaA, Panasonic Corporation, NAMICS Corporation, Nordson Corporation, H.B Fuller, Epoxy Technology Inc., Yincae Advanced Material, LLC, Master Bond Inc., Zymet Inc., AIM Metals & Alloys LP, Won Chemicals Co. Ltd., and Bondline Electronic Adhesives, Inc.

Research Methodology

A realistic methodology, along with a holistic approach, makes the base for sharp insights, which are provided in the underfill market report for the study evaluation period. This TMR report comprises detailed information on growth prospects, along with riveting insights and forecast assessment of the market.

Extensive primary and secondary research has been employed to obtain strong insights into the underfill market. The report has further gone through a cross-validation by in-house professionals to make the underfill market report one-of-its-kind with the highest credibility.

Underfill Market - Segmentation

The global underfill market has been divided on the basis of material, application, and region. Each of these segments has been analyzed in detail to provide readers with a holistic view of the industry.

Material

  • Capillary Underfill
  • No Flow Underfill
  • Molded Underfill

Application

  • Flip Chips
  • Ball Grid Array
  • Chip Scale Packaging

Region

  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa

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Underfill Material Market

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