DALLAS -- The 3D IC market is expected to reach $6.55 billion by 2016, a five-year CAGR of 16.9%, says a new report.

The transition from 2D packaging to 3D packaging is considered to be one of the major developments in the semiconductor industry, says MarketsandMarkets, a research firm. Use of TSV interconnects within die stack instead of wirebond interconnect and board-level routing helps to save the system energy consumption to a large extent, and Samsung and Xilinx have been among the innovators.

Though bullish, some experts see issues with integration and cost as limiting the rate of adoption. In December, CIRCUITS ASSEMBLY contributing editor Jan Vardaman said," There is no question that 3D TSV will be adopted, but the timing for mass production depends on how the cost of the new technology compares with that of existing technologies and how quickly manufacturing issues are resolved."

Memory products are considered to have great potential for 3D ICs and TSV interconnects, with a market share of approximately 40%, followed by sensors. Consumer electronics application sector is observed to hold the largest share in 3D ICs and TSV interconnects market with high demand for it in a number of end-products such as smartphones, tablet PCs, e-readers, laptops, and more.

The global 3D IC market is expected to grow from $2.21 billion in 2009 to $6.55 billion in 2016, a CAGR of 16.9% from 2011 to 2016. Asia is forecast to have the highest growth rate, thanks in large part to Taiwan Semiconductor Manufacturing Co. (TMSC), Samsung, United Microelectronics Corp. and others.

For more on 3D packaging and TSVs, click here and here.