CoWoS military strategists must compete in Taiwan, where TSMC and ASE have solid advantages

2024/11/08

TechNewsTechnology News
November 04, 2024
Author Central News Agency Zhong Rongfeng

Artificial intelligence AI chips drive CoWoS advanced packaging to be in short supply. TSMC is still the leader in CoWoS production capacity, and ASE Investment Controls is actively cooperating with the layout. Although TSMC cooperates with packaging and testing factory Amkor in Arizona, the CoWoS production capacity is still in Taiwan. , it is estimated that ASE Investment Holdings’ advanced packaging and testing performance will explode next year.

ASE Investment Controls is actively deploying CoWoS advanced packaging production capacity. Chief Financial Officer Dong Hongsi pointed out that ASE Investment Controls cooperates with TSMC to continue investing in advanced processes, including CoWoS front-end CoW (Chip on Wafer) wafer process, OS process and advanced testing projects.

Silicon Products, a subsidiary of ASE Investment Holdings, recently announced an investment of NT$419 million to acquire the land use rights of Erlin Park in Zhongke Changhua to expand CoWoS advanced packaging; Silicon Products also invested a further 3.702 billion yuan to acquire the Yunlin Douliu factory from Minghui Energy Land is also needed to expand CoWoS advanced packaging capacity.

ASE Semiconductor announced in early October that the Kaohsiung City Dajiu K28 factory is expected to be completed in 2026. The main purpose is to expand CoWoS advanced packaging and testing production capacity.

Industry insiders analyze that ASE and Silicon Products work closely with TSMC in the OS process of the advanced packaging back-end of CoWoS-S. A local investment consulting firm estimates that by 2025, TSMC may outsource 40% to 50% of its CoWoS-S back-end OS packaging process to ASE Investment Control, which could increase related performance by approximately US$150 million to US$200 million.

ASE Investment Holdings' advanced packaging and testing performance this year exceeds US$500 million. Next year, the proportion of advanced testing performance in advanced packaging and testing revenue can increase to 15% to 20%. American and local investment consulting firms estimate that ASE Investment Holdings' performance in advanced packaging and testing is expected to continue to double in 2025.

According to market analysts, TSMC will still dominate the CoWoS front-end CoW wafer process by 2025. American legal entities expect that ASE will invest in the CoWoS front-end CoW wafer process as early as the second half of 2025 and have the opportunity to start contributing revenue.

However, in early October, TSMC announced that its Arizona factory in the United States would cooperate with the packaging and testing giant Aike to expand integrated fan-out (InFO) and CoWoS advanced packaging. The market is paying attention to whether it will have an impact on ASE's investment control. According to the analysis of the American legal person, this move will pose limited challenges to ASE Investment Control. ASE Investment Control and Silicon Precision are still the main partners of TSMC's CoWoS-S packaging.

The legal person pointed out that NVIDIA’s high-end AI graphics processor chips will use TSMC’s CoWoS-L packaging in the future, and the front-end CoW wafer process will remain in Taiwan; in addition, the CoWoS advanced packaging produced in Taiwan has a price and Efficiency is superior to Ecker's Arizona plant.

From the equipment side, even if Aike starts to place large-scale orders for CoWoS, since the equipment delivery period is as long as 6 to 9 months, Aike will not be able to build CoWoS production capacity until the second half of 2025 at the earliest. Ready.

U.S. legal entities investigate supply chain information and evaluate it. It is currently speculated that Apple uses TSMC’s U.S. factory’s 4-nanometer process application processors and module chips, and may place an order for Aike’s CoWoS packaging production capacity, but it does not rule out other uses in the future. If American customers place orders for artificial intelligence AI special application chips (ASICs) and AI graphics processors (GPUs) produced at TSMC's U.S. wafer fab, they may also use Aike's CoWoS packaging capacity.

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