Advanced Semiconductor Packaging on the Rise: Major Players Expand Capacity

Recently, several semiconductor giants, including ASE Group, TSMC, Tongfu Microelectronics, Huahong Technology, Yongxin Electronics, and JCET, have announced investments in advanced packaging technologies and capacity expansion, targeting high-performance memory and computing for AI applications. As the memory market recovers and demand for AI and high-performance computing grows in 2024, packaging companies are showing promising results.

ASE Expands CoWoS Capacity

On October 28, ASE Technology Holding, a leader in semiconductor packaging and testing, announced that its subsidiary, SPIL, plans to invest TWD 419 million to acquire land use rights in the Zhongke Erlin Park of Changhua, Taiwan, for a 42-year lease. The investment is aimed at expanding CoWoS advanced packaging capacity.

Despite expanding efforts, advanced packaging capacity still faces a shortage. TSMC's capacity gap has extended to OSAT (Outsourced Semiconductor Assembly and Test) firms to help meet market demand.

TSMC President C.C. Wei previously mentioned that CoWoS capacity remains tight, with TSMC working to more than double its CoWoS packaging capacity by 2024 and further expanding in 2025 to bridge the supply-demand gap.

According to recent industry news, TSMC has outsourced the key CoW front-end and WoS back-end processes to ASE's SPIL and Amkor. With the growing CoWoS capacity gap, ASE, Amkor, and others are expected to receive more spillover orders from TSMC, further boosting their 2024 business performance.

TSMC to Continue Expanding Advanced Packaging Capacity?

Upstream sources in the semiconductor industry revealed that TSMC, which acquired Innolux's 5.5th-generation LCD panel factory in Tainan Science Park in August, is considering purchasing additional nearby factories. The acquisition, valued at TWD 17.14 billion, has now been converted into the Advanced Backend Fab 8 (AP8). The facility is expected to receive equipment in April 2024 and start production in the second half of next year.

The facility, reportedly nine times the size of the Zhunan advanced packaging facility, primarily focuses on CoWoS capacity expansion but may also incorporate fan-out and 3D IC advanced packaging lines in the future.

The market recently disclosed that TSMC has submitted a proposal to acquire additional factories around the former Innolux facility. According to upstream sources, AI chip demand is surging, and TSMC's expansion of advanced packaging capacity is unprecedented. TSMC has not yet commented on the proposal.

Looking ahead, demand for CoWoS advanced packaging is expected to grow substantially. According to TrendForce, NVIDIA's demand for CoWoS is set to increase by over 10 percentage points by 2025, driven by the Blackwell series rollout. Recent adjustments to NVIDIA's product line suggest a focus on providing B300 and GB300 GPUs to major North American CSPs, both using CoWoS-L technology.

Runxin Technology and Qiyimore Sign CoWoS-S Heterogeneous Integration Agreement

On October 28, Runxin Technology announced that it has signed a "CoWoS-S Heterogeneous Integration Packaging Service Agreement" with Qiyimore (Shanghai) Integrated Circuit Design Co., Ltd. Runxin Technology will integrate memory, computing, and other chiplet resources based on Qiyimore's requirements for heterogeneous integration design, performing packaging and wafer production at an advanced packaging facility. This agreement is expected to positively impact the company's resource integration in AI and computing chip segments.

Huahong Technology's Advanced Packaging Projects Progress

Huahong Technology's PanGu Semiconductor advanced packaging project was recently completed, and in September, its CNY 10 billion advanced packaging base in Nanjing began construction.

The PanGu Semiconductor multi-chip high-density board-level fan-out advanced packaging project, with an investment of CNY 3 billion, is set to have its first phase equipment installed and ready for production by Q1 2025. Full project completion is expected by 2028, with an annual output value exceeding CNY 900 million and an economic contribution of over CNY 40 million annually.

Additionally, Huahong's Nanjing project, with an investment of CNY 10 billion, aims to build an internationally advanced integrated circuit packaging and testing production line. Products from this line will be used in memory, RF, computing, and AI applications.

In Q3, Huahong Technology reported revenue of CNY 10.53 billion, a year-on-year increase of 30.52%, with net profit growing by 330.83% to CNY 357 million.

Tongfu Microelectronics Advances Major Packaging Projects

Tongfu Microelectronics also made progress on two of its advanced packaging projects, with a total investment exceeding CNY 10 billion. The Tongfu Tongda advanced packaging base and Memory Phase II project achieved significant milestones.

The Tongfu Tongda advanced packaging base project, with a total investment of CNY 7.5 billion, aims to begin mass production by April 2029 and focus on key integrated circuit packaging products such as multi-layer stacking, flip-chip, wafer-level, and panel-level packaging.

The Tongfu Memory Phase II project, with an investment of CNY 1.6 billion, will expand monthly capacity to 150,000 wafers for high-end embedded products like FCCSP and uPOP.

JCET's Q3 Profit Surge Amid New Acquisition

On October 25, JCET reported record Q3 revenue of CNY 9.49 billion, a year-on-year increase of 14.9%. The company completed its acquisition of an 80% stake in semiconductor packaging firm ChengDie Semiconductor, further enhancing its smart manufacturing capabilities in the storage and computing electronics sectors.

JCET also accelerated the construction of its automotive chip packaging facility in Lingang, Shanghai, which is expected to bolster its packaging capabilities for power modules and automotive applications.

Yongxin Electronics to Raise CNY 1.2 Billion for Advanced Packaging

Yongxin Electronics announced a plan to raise up to CNY 1.2 billion for its multi-dimensional heterogeneous advanced packaging R&D and industrialization project. The project will improve the company’s production capacity in fan-out and 2.5D/3D packaging products.

Jingfang Technology Expands Malaysian Presence

Packaging company Jingfang Technology announced a USD 30 million investment to expand its Malaysian subsidiary, WaferTek Solutions Sdn Bhd, and purchase land and facilities in Penang to boost production.