Core Viewpoint - TSMC is considering converting a wafer fabrication plant in Arizona into an advanced packaging facility due to the significant demand from U.S. customers for CoWoS technology, which is crucial for enhancing AI performance [1][2] Group 1: TSMC's Strategic Moves - TSMC plans to establish an advanced packaging factory in Arizona by the end of 2027 to address the supply bottleneck and meet the growing demand from AI GPU and ASIC manufacturers [1] - The company is accelerating the introduction of advanced packaging production lines in the U.S. and intends to repurpose an old chip manufacturing site for this purpose [1] - Previously, TSMC outsourced its packaging services in the U.S. to companies like Amkor, but this situation is changing as TSMC aims to bring these capabilities in-house [1] Group 2: Competitive Landscape - Due to supply constraints in CoWoS packaging, U.S. customers are turning to competitors like Intel for advanced packaging solutions, with companies such as Microsoft, Qualcomm, Apple, and Tesla preparing to adopt Intel's EMIB and Foveros technologies [2] - The shift in demand towards Intel's packaging solutions has prompted TSMC to expedite its production plans in Arizona, highlighting the competitive pressures in the semiconductor industry [2] - The development of TSMC's Arizona project is crucial as it is expected to fulfill a significant portion of the U.S. chip industry's needs [2]

Core Insights - The article discusses the increasing demand for advanced packaging technologies in the semiconductor industry, particularly due to the tight capacity of TSMC's CoWoS technology, which has led companies to consider Intel's EMIB as an alternative solution [1][2]. Group 1: TSMC's CoWoS Capacity Constraints - TSMC's CoWoS advanced packaging capacity is highly constrained, making it difficult for many ASIC and second-tier AI chip manufacturers to secure sufficient support [1]. - The demand for cloud AI chips has surged, leading to full capacity utilization at TSMC and its associated testing supply chain [2]. - There is a growing need for local production in the U.S., which TSMC currently cannot fully meet due to the requirement of returning the backend processes to Taiwan [2]. Group 2: Intel's EMIB Technology - Intel's EMIB technology is gaining attention due to its cost-effectiveness and good thermal performance, making it suitable for products with lower technical specifications [2][3]. - Companies like Marvell and MediaTek are reportedly exploring EMIB to offer more affordable solutions to their customers [2]. - EMIB is seen as a mature technology that can support urgent Tier 2 projects that require quick design-to-production timelines [3][4]. Group 3: Industry Movements and Collaborations - Major companies like Apple and Qualcomm are actively recruiting talent with knowledge of EMIB technology, indicating a strategic shift towards this packaging method [3]. - The integration of TSMC's front-end wafer fabrication with Intel's EMIB backend is being considered as a viable business model for AI chip supply chains [5]. - There is a trend of increasing collaboration among companies testing EMIB, which may lead to stable order volumes in the long term if successful [4][6].

Core Viewpoint - Intel's EMIB advanced packaging technology is gaining attention from Apple and Qualcomm, being considered a viable alternative to TSMC's products [1] Group 1: Company Interest - Apple has recently posted job openings for DRAM packaging engineers, specifically seeking experience in advanced packaging technologies such as CoWoS, EMIB, SoIC, and PoP [1] - Qualcomm is also looking for a product management director for its data center business, with a requirement for familiarity with Intel's EMIB technology [1] Group 2: Technology and Market Position - Intel's CEO and executives have emphasized that their Foveros and EMIB technologies have attracted interest from multiple customers and are capable of large-scale production [1]

Investment Rating - The report rates the advanced packaging industry as "stronger than the market" [1] Core Viewpoints - The advanced packaging technology is positioned as a key path to overcome the limitations of Moore's Law, driven by the exponential growth in computing power required for AI and large model training [2][14] - The global advanced packaging market is projected to exceed $79 billion by 2030, highlighting its role as a core growth engine in the semiconductor industry [2][23] - The demand for advanced packaging is surging due to the increasing need for high-performance AI chips, with TSMC's CoWoS technology becoming a critical support process for high-performance AI chips [2][17] Summary by Sections Chapter 1: Growing Demand for Intelligent Computing - The demand for intelligent computing is rapidly increasing, with significant growth in enterprise-level markets [5][9] - China's intelligent computing scale is expected to reach 725.3 EFLOPS in 2024, a year-on-year increase of 74.1% [9][10] Chapter 2: Diverse Packaging Paths - Advanced packaging technologies are evolving rapidly, with a focus on 2.5D/3D packaging solutions that are gaining popularity [2][18] - The global advanced packaging market is expected to grow from $46.1 billion in 2024 to $79.1 billion by 2030, with a compound annual growth rate (CAGR) of 21.71% for 2.5D/3D packaging [23][24] Chapter 3: Investment Recommendations - The report suggests focusing on key players in the advanced packaging sector, such as Changdian Technology, Tongfu Microelectronics, and JCET [2][24]

Core Viewpoint - ASML's introduction of the TWINSCAN XT:260 marks its strategic entry into the advanced packaging market, highlighting the increasing importance of advanced packaging in semiconductor technology as traditional scaling approaches physical limits [2][34]. Group 1: Market Dynamics - The advanced packaging market is experiencing significant growth, driven by the rising demand for AI chips and high-performance computing, with a projected market size of $45.73 billion in 2024, expected to reach $113.33 billion by 2033, reflecting a compound annual growth rate (CAGR) of 9.5% [3]. - The demand for advanced packaging equipment is also on the rise, with projections indicating that the backend equipment revenue will reach approximately $7 billion by 2025 and exceed $9 billion by 2030, with a CAGR of nearly 6% [3]. Group 2: Equipment Trends - Key equipment areas such as thermal compression bonding (TCB) and hybrid bonding are rapidly growing, with the TCB market expected to reach $936 million by 2030, driven by integration needs in memory and AI platforms [6]. - The hybrid bonding equipment market is projected to grow at a CAGR of 21.1%, reaching $397 million by 2030, emphasizing its critical role in advanced 3D integration [9]. Group 3: Competitive Landscape - Major players in the backend equipment market include DISCO, BESI, K&S, ASMPT, and Hanmi, each specializing in different aspects of semiconductor manufacturing [21]. - DISCO leads in wafer thinning and cutting technologies, while BESI focuses on hybrid bonding equipment, indicating a diverse competitive landscape [23][26]. Group 4: ASML's Strategic Position - ASML's TWINSCAN XT:260 is designed specifically for advanced packaging, filling a technological gap in high-end packaging lithography and enhancing production efficiency and precision [34][37]. - The XT:260 features significant advancements, including a resolution of 400nm and a production efficiency of 270 wafers per hour, which is four times that of previous models [37]. Group 5: Domestic Market Challenges and Opportunities - Domestic suppliers currently meet less than 14% of local backend equipment demand, facing challenges from reliance on imported technologies and geopolitical uncertainties [41]. - However, domestic manufacturers are gaining momentum, supported by policies and capital investments, with expectations that the domestic backend equipment localization rate will exceed 20% by 2025 [42].

Group 1 - The core viewpoint is that the advanced packaging market is expanding due to the rapid development of AI servers and smart vehicles, leading to increased demand for high-integration packaging solutions like Chiplet and 2.5D/3D [1][2] - Advanced packaging is becoming a key technology in the high-performance computing cycle, overcoming the limitations of Moore's Law, as traditional processes struggle with bandwidth, power consumption, and integration density challenges [1][2] - The global advanced packaging market is projected to reach $45 billion in 2024, accounting for over 55% of the overall packaging market, with a forecasted CAGR of 9.4% from 2024 to 2030 [2] Group 2 - The Chinese advanced packaging market is expected to grow rapidly, reaching a market size of 69.8 billion yuan in 2024, with a compound annual growth rate (CAGR) of 18.7% from 2020 to 2024, although its penetration rate remains at 40% [3] - Major players like TSMC are leading the AI packaging ecosystem with their CoWoS technology, while domestic manufacturers are accelerating their layouts to capture market opportunities [4] - Companies such as Longi Technology, Tongfu Microelectronics, and Huatian Technology are making significant advancements in various packaging technologies, positioning themselves competitively in the high-end process breakthrough and market share enhancement [4]

Core Viewpoint - The article emphasizes the critical role of packaging technology, particularly 2.5D packaging, in the development of AI chips, highlighting Intel's EMIB technology as a key solution to meet the growing demands in this sector [1][3][30]. Group 1: Importance of 2.5D Packaging - 2.5D packaging is not a new concept but has gained renewed significance in the AI chip domain, allowing for the integration of multiple functional units within a single package, thus providing a balance between complexity and performance [3][4]. - AI chips require high bandwidth and low latency for efficient inter-chip communication, which traditional packaging methods struggle to provide. 2.5D packaging enhances data transfer efficiency while maintaining a simpler manufacturing process [3][4]. Group 2: Advantages of EMIB Technology - EMIB technology offers several advantages: lower costs due to high wafer utilization, higher yield by reducing complex processing steps, and faster production cycles compared to traditional methods [4][5][8]. - EMIB's design allows for greater scalability and flexibility, making it suitable for integrating more HBM or complex workloads, thus enhancing performance potential for AI applications [8][9]. Group 3: Intel's Leadership in Packaging Technology - Intel has been a pioneer in packaging technology for over fifty years, continuously advancing from early wire-bond architectures to modern 2.5D and 3D technologies, establishing itself as a leader in the field [13][20]. - The company has completed over 250 2.5D design projects across various applications, demonstrating its extensive experience and capability in advanced packaging solutions [27]. Group 4: Future Developments - Intel is actively working on larger packaging sizes and exploring glass substrate technology, which is expected to become mainstream in the coming years, further enhancing packaging capabilities for AI accelerators [29][30].