<p>Encapsulation is critical for ensuring the durability and reliability of integrated circuits (ICs) in modern electronics, with epoxy molding compounds (EMCs) being widely adopted due to their cost-effectiveness, adaptability, and robust mechanical properties. This review aims to provide a comprehensive analysis of EMC encapsulation processes in IC packaging by comparing wafer-level packaging (WLP) and component-level packaging (CLP) while addressing key challenges and exploring future research directions. The review assesses key encapsulation techniques, including transfer molding, compression molding, and underfill encapsulation, highlighting their advantages, challenges, and applicability across various packaging geometries. It also examines critical process parameters, optimization strategies, and reliability testing protocols to address defects like voids, warpage, and delamination. Emerging solutions, including bio-based resins and recyclable materials are explored to enhance sustainability. The study identifies significant challenges in EMC encapsulation, including material limitations, interfacial stress and environmental concerns. It also highlights the potential of advanced EMC formulations with improved thermal conductivity, three-dimensional (3D) integration, and Artificial Intelligence (AI) driven process control to address these issues. The review highlights the importance of interdisciplinary collaboration in advancing encapsulation technologies, ensuring reliability, miniaturization, and environmental responsibility in the semiconductor industry. This review provides a comprehensive and up-to-date analysis of EMC encapsulation processes, offering insights into both current challenges and future research potentials. The work emphasizes the need for innovative solutions to meet the evolving demands of the semiconductor industry, making it a valuable resource for researchers and industry professionals.</p>