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The global sales of underfill materials are estimated to amount to $236.5 million by the end of 2016, and will reach $448.3 million by 2024 at a CAGR of over 8.3%, according to a new report by Transparency Market Research. The growth of this market is mainly dependent on the development of the semiconductor industry.
The structure of the underfill materials market is extremely consolidated, with Henkel AG & Co. KGaA and NAMICS Corp. dominating the scene with a massive 81% share in 2015. Shifting the focus from mature to emerging markets is perhaps one of the most successful growth strategies adopted by these players.
According to the report, the market for underfill materials holds immense promise for new entrants. With sufficient finances, these players can choose to develop materials through non-traditional approaches and save production cost and at the same time enjoy good margins by keeping the material cost high. Several new players have been venturing into areas still unexplored by leading companies, such as 3D systems, power devices, and micro mechanical devices.
Capillary Underfill Materials to Exhibit Strong Growth through 2024
On the basis of application, the underfill materials market is segmented into flip chips, ball grid array (BGA), and chip scale packaging (CSP). Accounting for a 52.6% share in 2016, flip chips are estimated to take the lead throughout the forecast period. Based on product type, the global market for underfill materials is classified into capillary underfill material (CUF), no-flow underfill material (NUF), and molded underfill material (MUF). Among these, capillary underfill materials are projected to exhibit a high growth rate through 2024.
From a geographical viewpoint, the global underfill materials market is segmented into North America, Latin America, Asia Pacific, Europe, and the Middle East and Africa. Asia Pacific is forecast to witness tremendous growth, reporting a CAGR of 9.7% in terms of revenue from 2016 to 2024. The region is also projected to dominate the global market with a revenue share of 64.4% by the end of 2016.
Growing Applications of Underfill Materials in Military and Aerospace
One of the most significant factors fueling the demand for underfill materials is the substantial demand for portable electronic equipment across most developed countries. Consumers have been seeking lighter, more compact, and faster components for portable devices with high functionality—and this is only achieved through the use of underfill materials. These materials not only boost the device’s thermal cycling resistance, but also provides impact resistance, strength, and improves its overall reliability. With the soaring demand for and usage of tablets and smartphones, the market for underfill materials is set to grow at a rapid pace.
The demand for underfill materials also stems from the automotive and military and aerospace sectors, TMR notes. Expanding budgets in the military and aerospace industry have given rise to the demand for portable electronics with greater functionality and the ability to withstand various forms of stress. In the automotive industry, underfill materials are used to improve the reliability of thermal cycling board levels and solder joints.
On the flip side, with end users seeking low-cost packaging solutions, the profit margins for underfill material suppliers is diminishing. This is threatening to hamper the growth of the global market. However, vendors across the supply chain are looking to collaborate with other players to maintain the momentum of the development of new and innovative materials.