SkyWater Technology is forecasting an $80 billion advanced packaging services (APS) market by 2033, as the semiconductor industry enters an era where performance gains rely on intelligent integration of packaging—not just shrinking chip sizes. Beginning in 2026, packaging will transition from a final step to a “front-line performance driver,” impacting critical sectors like automotive, aerospace, and defense. According to Thomas Sonderman, CEO of SkyWater Technology, “APS is now the force multiplier reshaping how systems are conceived, built, and brought to market.” This shift towards advanced packaging, demonstrated by SkyWater’s domestic production hubs in Texas, Florida, and Minnesota, prioritizes secure, traceable U.S. builds and resilient supply chains—transforming semiconductor manufacturing into a strategic necessity.
Advanced Packaging Drives 2033’s $80 Billion Semiconductor Market
The semiconductor industry is entering a new phase where performance gains rely less on traditional scaling and more on innovative integration of advanced packaging processes, beginning in 2026. Bloomberg Intelligence forecasts the global advanced packaging services (APS) market will surge to nearly $80 billion by 2033, signaling a significant shift in competitive advantage toward companies capable of rapid, localized, and large-scale integration. This evolution is particularly crucial for sectors demanding unwavering reliability, like automotive, aerospace, defense, and industrial applications.
This year, 2026, marks a turning point for chiplet architecture, expanding beyond high-performance computing into foundational silicon for diverse markets including automotive, AI acceleration, and 5G/RF. “2026 is the Year Packaging Delivers at Scale,” according to industry observation, with co-design moving earlier in the process to shorten development and reduce costs. Technologies like hybrid direct bonding and fan-out-wafer level packaging are now maturing for mainstream manufacturing, promising gains in density, thermal control, and interconnect performance. “Secure, traceable U.S.
2026 Marks Chiplet Adoption Expansion Across Diverse Verticals
The semiconductor landscape is poised for significant change as chiplet adoption broadens beyond high-performance computing in 2026, extending into sectors like automotive, AI acceleration, 5G/RF, and industrial control systems. This expansion is driven by a move towards “co-design” where packaging, testing, and reliability are considered earlier in the design process, shortening development cycles and reducing costs. “Secure, traceable U.S. Customers in Minnesota have already reported “measurable improvements in delivery confidence and lead time predictability.” The focus has shifted to tangible outcomes – shorter lead times and resilient supply chains – solidifying the importance of onshoring for national security and economic competitiveness.
SkyWater’s Domestic Production Achieves Scalable Supply Chain Resilience
The semiconductor industry is undergoing a fundamental shift, moving beyond gains from shrinking node sizes to focus on advanced packaging as a key performance driver, particularly as “packaging firmly shifts from a final back end of line process step to front-line performance driver,” according to SkyWater Technology CEO Thomas Sonderman. “Secure, traceable U.S. builds are not marketing points anymore,” Sonderman asserts, “They are the baseline expectation” for industries demanding compliant, competitive systems. The company emphasizes that delivering reliably and at scale is now the key to success.
In 2026, packaging firmly shifts from a final back end of line process step to front-line performance driver.
Thomas Sonderman, CEO SkyWater Technology