Technological Breakthroughs and Localization Substitution Drive Structural Upgrading of the IC Lead Frame Industry

As a core basic material for semiconductor packaging, IC lead frames perform critical functions of electrical connection, mechanical support, and heat dissipation for chips, making them indispensable in consumer electronics, automotive electronics, industrial control, and other fields.

Since 2025, benefiting from the explosive demand of downstream emerging industries and breakthroughs in local technological innovation, the global IC lead frame industry has entered a period of structural upgrading centered on high precision, high reliability, and localization substitution.

Data shows that the global IC lead frame market size reached 3.2 billion US dollars in 2025, with the Chinese market exceeding 11.2 billion yuan, registering a compound annual growth rate (CAGR) of 7.6% over the past five years and emerging as the global growth engine. In terms of demand structure, the automotive electronics sector stands out prominently. Driven by the trends of electrification and intelligence, the demand for automotive-grade lead frames is growing at an annual rate of over 12%. The performance requirements of high temperature resistance and electromigration resistance are propelling the industry towards upgrading to high-reliability materials. Meanwhile, the popularization of 5G communications, AI chips, and IoT devices has spurred a surge in demand for high-density, fine-pitch packaging. As the mainstream product in the high-end market, etched lead frames are expected to account for 33.2% of the market by 2029.

Technological breakthroughs have become the core driving force for industry development. To address the delamination challenge in the stamping of ultra-thin lead frames (0.2mm class), domestic enterprises have launched flexible clamping solutions. Through bionic material design, anti-static treatment, and modular structures, the success rate of grasping and separating has been increased to 99.99%, effectively resolving the pain points of deformation and contamination in traditional processes. In the high-end product segment, leading local enterprises continue to increase R&D investment. The national industry standard for etched lead frames, led by these enterprises, has driven the precision of domestic etching technology to below 10μm, with some product lines already entering the core supply chains of top packaging and testing enterprises such as Changjiang Electronics Technology and Tongfu Microelectronics.

The localization substitution process is accelerating. Currently, domestic lead frame production capacity is mainly concentrated in the Yangtze River Delta, Pearl River Delta, and Bohai Rim regions. The self-sufficiency rate of mid-to-low-end stamped products has exceeded 90%, while the localization rate of high-end etched products remains below 20%, relying on international suppliers such as Japan's Mitsui Kinzoku and South Korea's HDS. To break this pattern, domestic enterprises are actively deploying capacity upgrades, with new etched lead frame production capacity added through expansion projects of high-end packaging materials.

At the policy level, the "14th Five-Year Plan" special project for semiconductor materials continues to advance, driving the target localization rate of etched lead frames to 30% by 2025. Industry analysts point out that the IC lead frame industry will exhibit two major trends in the next five years: first, continuous upgrading of materials and processes, with high thermal conductivity copper alloys, three-dimensional structural design, and anti-static surface treatment technologies becoming R&D priorities; second, restructuring of the market pattern. Through industry-university-research collaborative innovation and capacity expansion, domestic enterprises are expected to achieve breakthroughs in the high-end market. It is projected that the Chinese market size will exceed 18 billion yuan by 2030, with the proportion of high-end products rising to over 50%.