Semiconductor packaging evolves to power connected ecosystems

The semiconductor industry is entering a transition phase that highlights the complementary roles of legacy and advanced packaging technologies. For decades, established methods such as wire bonding and single-die packaging have supported large-scale electronics manufacturing, powering consumer products, communication systems, and industrial applications. These techniques continue to be widely used due to their cost-efficiency, reliability, and scalability across diverse devices.

Simultaneously, as devices demand smaller footprints, greater data throughput, and improved energy efficiency, the adoption of advanced packaging technologies is accelerating. This shift does not suggest the obsolescence of legacy packaging. Instead, the industry appears set for a period of coexistence, where mature solutions address established needs while advanced packaging supports emerging, high-performance applications.

Legacy Packaging in Connected Ecosystems

Legacy packaging continues to serve the industry effectively at scale. Its established processes, proven yield, and ability to support high-volume production make it a dependable choice for manufacturers. Traditional computing, consumer electronics, and industrial systems still rely on these methods, meeting performance requirements without added design complexity or cost.

For many markets—especially those prioritising affordability, product longevity, and secure supply chains—legacy packaging remains integral. Instead of being phased out, it continues to provide a stable base that supports both incremental and advanced innovation.

Advanced Packaging Powers Data Demands

Applications requiring higher integration, faster processing, and lower latency—such as autonomous vehicles, Artificial Intelligence (AI), 5G, and hyperscale computing—are exposing the limits of conventional techniques. Advanced packaging methods, including 2.5D integration, 3D stacking, and fan-out wafer-level packaging, offer solutions to these challenges.

These technologies integrate multiple chips into a single package, reduce interconnect distances, and enhance power efficiency. However, their implementation is currently best suited for performance-intensive applications, while legacy packaging remains essential across broader, cost-sensitive device segments.

Packaging’s Role in Connectivity Systems

Packaging has a direct influence on connectivity performance. Advanced packaging supports faster signal transmission, improved power efficiency, and stable operation in high-throughput environments—key for applications in 5G, cloud computing, and real-time IoT systems.

Nonetheless, not all connected devices demand these capabilities. Billions of devices globally continue to rely on legacy packaging for dependable and cost-effective connectivity, enabling inclusive and scalable digital ecosystems.

5G and edge computing demands: The global deployment of 5G networks is pushing performance requirements across both core and edge devices. Advanced packaging is proving beneficial for edge applications by supporting localised computing, which reduces latency and eases central processing loads. This enables faster services in fields such as connected healthcare, industrial automation, and urban infrastructure.

Even so, the larger 5G infrastructure ecosystem continues to depend on legacy packaging for its supporting systems and devices, which require scale, reliability, and economic efficiency. Both technologies are needed to fulfil the full potential of 5G.

Enabling IoT at both ends of the spectrum: The Internet of Things is marked by its scale and diversity. Advanced packaging is essential for high-end IoT nodes that perform local analytics, operate at low power, and fit complex computing into compact form factors. On the other hand, simple sensors and actuators—especially those deployed across agriculture, manufacturing, or supply chains—depend on legacy packaging for cost-effective mass deployment.

This dual approach is enabling broad-based IoT growth without compromising performance or affordability.

Supporting AI and data-centric workloads: AI workloads benefit from tighter integration between processing and memory. Advanced packaging helps reduce data transfer latency, improve compute throughput, and increase energy efficiency. This becomes crucial in use cases such as natural language processing, autonomous systems, and predictive analytics.

However, many AI workloads still run effectively on devices using legacy packaging—especially where real-time performance requirements are moderate. Together, both packaging approaches are shaping the evolving AI hardware ecosystem.

Balancing automotive system needs: In the automotive industry, safety, performance, and cost must be balanced carefully. Advanced packaging supports the complex, high-speed requirements of autonomous systems and in-vehicle communications. Simultaneously, legacy packaging is still used in subsystems such as infotainment, battery management, and power control where stability and maturity are essential.

This division allows manufacturers to manage costs while delivering innovation and safety in next-generation vehicles.

Environmental and operational considerations: With sustainability gaining prominence, packaging technologies are also being evaluated for their environmental and energy impact. Advanced packaging reduces energy consumption and improves thermal performance in data-heavy applications. Meanwhile, legacy packaging contributes through long-established, efficient processes that generate less waste in high-volume production.

Together, both approaches can support the industry’s move towards lower emissions and reduced resource consumption.

Managing Transition and Complexity

While advanced packaging introduces technical benefits, it also involves higher design complexity, increased cost, and demands new manufacturing capabilities. Legacy technologies continue to offer cost-effective, reliable alternatives, particularly for markets and applications where margins are tight or long-term reliability is prioritised.

To remain competitive, companies and countries will need to invest in both domains—preserving the strengths of legacy infrastructure while expanding capacity for advanced manufacturing.

Semiconductor packaging is not evolving through a replacement model but through mutual reinforcement. Advanced packaging will expand its role in high-performance computing, next-generation mobile networks, and AI-centric devices. Legacy packaging will continue to be crucial for scaled deployments in consumer, industrial, and infrastructure segments.

The future of the industry lies in how effectively it integrates both paradigms to serve a spectrum of market needs.

The author is a Co-Founder of Suchi Semicon.