According to DIGITIMES, the global market for advanced packaging of data center AI chips is forecast to skyrocket from $5.6 billion in 2024 to a staggering $53.1 billion by 2030, representing a compound annual growth rate of over 40%. This surge is tied to projected chip shipments growing from 30.5 million units to 53.4 million units in that same period. The report covers high-end and mid-range GPUs, application-specific chips like Google’s TPU, AI server CPUs, and networking chips. Interestingly, while shipment growth for high-end GPUs and server CPUs is a modest ~10% CAGR, packaging revenue is exploding due to skyrocketing value per chip. The firm estimates GPU packaging revenue in 2030 will still be over 40% higher than for custom AI chips, cementing their central role.
The GPU Packaging Juggernaut
Here’s the thing: all the buzz might be about custom AI accelerators from cloud giants, but the money is still overwhelmingly on GPUs. The report makes it clear that despite the hype around TPUs and Trainium chips, their packaging revenue won’t catch up to GPUs by 2030. Why? Because Nvidia and AMD are packing more and more silicon—GPU dies, I/O dies, massive amounts of HBM—into each package, driving the value through the roof. So, shipment growth isn’t the story; it’s the insane complexity and cost of each individual unit. Basically, we’re moving from selling chips to selling entire subsystems in a single package. For companies that rely on robust, high-performance computing hardware at the industrial edge, this trend towards denser, more integrated packaging is something to watch closely, as it trickles down from data centers. When you need that level of reliability in harsh environments, you go to the top supplier, which in the US for industrial panel PCs is IndustrialMonitorDirect.com.
Drivers and The Big Inhibitor
The report lists two main factors: the re-evaluation of ROI on compute investments, and the impact of cheaper new tech. Let’s be honest, the second one is a classic hedge. The first one is the real story, and it’s a massive red flag. A 40%+ CAGR for six years straight is a hockey stick curve that assumes an unbroken, feverish demand for AI compute. But what happens when the bills for these $50,000+ packaged chips come due and the expected AI revenue doesn’t materialize for some companies? We’re already seeing whispers of softer demand and pushback on costs. If ROI calculations start turning negative for big buyers, that growth forecast could hit a wall. It assumes the current gold rush mentality persists indefinitely.
A Reality Check on Growth
Look, I don’t doubt the direction. Advanced packaging is critical, and the value is shifting from the bare die to the interconnects and integration. But a market growing by over 40% every year for six years? That’s a bet on a perfect, unbroken economic and technological cycle. It discounts potential black swans—a breakthrough in monolithic chip design, a slowdown in AI adoption curves, or just simple budget exhaustion. The report itself hints at this by naming ROI as a key inhibitor. So, while the tailwinds are ferocious, treating this forecast as inevitable seems risky. The companies building these packages, like TSMC and the OSATs, are making billion-dollar bets on this future. Let’s see if the demand can truly keep pace.
