Advanced chip packaging unlocks energy, cost, and performance gains for AI and DCs

Cleantech Group’s latest research highlights how innovation in advanced chip packaging is revolutionizing the semiconductor industry, offering massive energy savings, faster performance, and significantly reduced production costs. With data centers projected to consume nearly 1,000 TWh of electricity globally by 2030, the shift toward efficient semiconductor design is no longer optional—it’s critical.

Global tech giants including Nvidia, Microsoft, and TSMC are doubling down on next-generation chips. In the U.S., over $50B in federal CHIPS Act funding was allocated to support domestic semiconductor research and manufacturing; $39B will be used to onshore domestic manufacturing of which $32B is allocated for Texas Instruments (TI).

Meanwhile, innovators such as Forge Nano, DEEPX, and Black Semiconductor are showing that smaller, more agile players can deliver outsized impact with technologies that cut chip energy use by up to 95%, like Intensivate.

“The digital infrastructure that powers AI, cloud computing, and consumer electronics is on an unsustainable path in terms of energy and emissions,” said Buff López, Associate, Materials & Chemicals at Cleantech Group.

“Innovators in chip packaging are slashing energy use, shrinking form factors, and unlocking higher performance per watt—reshaping what’s possible across industries,” he added.

North American and Asia-Pacific innovators raised a majority of funding with a few that stood out. Singapore-based Silicon Box raised nearly $100M Growth Equity in 2024 for its silicon-based design and integration services bringing total funding to near $300M. Korea Republic-based DEEPX raised $80.5M Growth Equity for its on-device AI semiconductor and computing solutions for robotics and security.

Key findings
• Massive efficiency gains. Technologies like GaN-/SiC-based chips offer 97–99% energy efficiency in data center applications—compared to 90% for traditional silicon—resulting in millions of dollars in annual savings and major emissions cuts.

• Emerging technologies dominate performance metrics. Novel approaches to semiconductor manufacturing have downstream impacts on chip performance, such as Forge Nano’s coatings that enable 40% faster processing. New chip packaging solutions also have an impact, such as Black Semiconductor’s graphene photonics that enable 1,000x faster data transmission.

• Start-ups gain traction. Along with companies such as Silicon Box and DEEPX closing funding rounds to scale semiconductor integration and on-device AI chips, UK-based Pragmatic and U.S.-based iDEAL Semiconductor are also drawing capital and commercial interest.

• Global expansion under way. TSMC, Intel, Apple, and other major players are investing more than $165B in new fabs across the U.S. and Europe. Project Stargate, a $500B joint venture between SoftBank, Oracle, OpenAI, and others, is developing AI supercomputers using next-gen chip technologies.

• Environmental imperative. A single data center rack outfitted with Intensivate chips can cut electricity use from 4,400W to 350W—reducing carbon emissions equivalent to thousands of pine trees. Regulatory moves in Oregon, the EU, and beyond, are beginning to mandate these kinds of improvements.

• Geopolitical and supply chain risks persist. U.S.-imposed tariffs on key semiconductor exports and China’s control of rare earth metals threaten to disrupt access to critical materials. Innovators are working to minimize material needs and localize manufacturing to mitigate these risks.

With semiconductors poised to become the backbone of global digital infrastructure, the market opportunity is immense—but so is the urgency to innovate. Generative AI alone accounts for 25% of the advanced chip packaging market today and is projected to grow 20% annually through 2035.