Advanced Packaging Reshapes Chip Industry in 2025

By Shubhendra Anand , 16 June, 2025

The world of semiconductors is evolving with new advanced multichip packaging innovations in 2025. Due to the advancements, the chip's performance improves, mobile devices and new GenAI technology can be produced promptly, and production and manufacturing costs are reduced. The industry will transform thoroughly by the year 2025.

The classical chip manufacturing method integrates all functions into a single monolithic die. Unfortunately, this strategy is becoming increasingly less effective and efficient as time progresses towards 2025 due to its low herculean yield, high costs, and lack of scalability. A new strategy that creates better integrated flexibility and efficiency with more modular designs is on the rise. The new design involves using multi-die packages, also known as Chiplets. Each chiplet has an individual die that is smaller in size.

In 2025, several industry leaders are adopting modern packaging approaches. Broadcom announced its revolutionary 3.5D XDSiP semiconductor technology in December 2024. This technology has been developed with the growing need for GenAI infrastructure. It allows customized chip developers to directly connect memory components to semiconductor chips, which enhances component performance. TSMC's advanced packaging techniques increase multiplier performance, enabling better chip production. Shipment production is expected to start in February 2026.

In January 2025, Jensen Huang, the CEO of NVIDIA, spoke about the company's evolving needs regarding the advanced packaging technology provided by TSMC. NVIDIA's latest Blackwell AI chip uses CoWoS-L (Chip on Wafer on Substrate - Large) technology instead of the previously used CoWoS-S. This increase shifts the chip's design, symbolizing NVIDIA's willingness to invest in infrastructure that assists with the changing AI needs.

ASE Technology Holding Co had projected revenue growth for 2024, which usually brings nearly all chip packaging and testing profits. Still, the giant had hoped they would gain revenue from advanced testing and packaging. The Corporation estimates revenue to increase from USD600 million in 2024 to USD1.6 billion in 2025 due to demand for AI programs. The imaging proposed gas given was noted leading-edge packaging would get seventy-five percent of this revenue, while the advanced testing portion would get a twenty-five percent share.

In January 2025, the U.S. Department of Commerce provided USD 1.4 billion to enhance semiconductor packaging capabilities. Because GenAI, along with mobile devices, require more compact, efficient, and high-performing chips, advanced packaging is poised to transform the semiconductor industry by 2025.

Advanced packaging market in the time period of 2014-2025: