The industrial logic of advanced packaging has changed.

The leading players in advanced packaging are making increasingly bold moves.

On August 28, Amkor Technology, the world's second-largest OSAT (outsourced semiconductor assembly and test) company, announced that it was adjusting the location of its advanced packaging and testing factory under construction in Arizona, USA. The area of the newly selected project site is nearly double that of the original one, and the total investment has also increased from $1.7 billion to $2 billion.

On October 6, Amkor announced another expansion of the project's investment scale, bringing the total investment to $7 billion. Amkor and the US government will build a new and state-of-the-art outsourced semiconductor advanced packaging and testing park in Arizona. After the project is fully completed, the park will have over 750,000 square feet of cleanroom space and create up to 3,000 high-quality jobs.

Amkor's expansion project has received support from the Trump administration's "CHIPS for America Program", the advanced manufacturing investment tax credit policy, as well as state and local governments. At the same time, the project has also received significant support from the industrial ecosystem. TSMC has signed a memorandum of understanding with Amkor, planning to transfer some of the packaging business from its Phoenix wafer fab to Amkor to avoid the several-week turnaround time required for cross-Pacific wafer shipments.

In fact, Amkor's recent series of actions regarding its new packaging and testing factory plans reflect the current situation of the entire advanced packaging industry. As the demand for advanced packaging continues to grow, governments around the world are introducing more favorable policies, and relevant leading companies are continuously expanding their production capacities. Meanwhile, cooperation between enterprises is becoming the new normal in the industry.

The industrial logic of advanced packaging has changed.

01 Dual Support from the Market and Policies

The changes in the advanced packaging industry first stem from a qualitative change in the market's demand for advanced packaging.

Currently, the global semiconductor industry's demand for advanced packaging is growing at an unprecedented rate. The core driving force behind this trend is that in the "post-Moore era", the performance improvement and cost-effectiveness brought about by traditional process node shrinkage are increasingly reaching bottlenecks. To continue the growth curve of chip performance, the industry is increasingly relying on advanced packaging technologies, achieving breakthroughs in system-level performance through innovative paths of miniaturization and integration.

The explosive development of artificial intelligence and high-performance computing (HPC) is another major engine of demand. AI applications represented by large models place extremely high requirements on computing infrastructure. Core chips such as GPUs and AI accelerators need to integrate high-bandwidth memory (HBM) through advanced packaging technologies like CoWoS to solve the "memory wall" and power consumption problems and meet the needs of massive data throughput and high-speed interconnection.

In addition, the increasing maturity of Chiplet technology has brought higher design flexibility and cost-effectiveness to the industry. By splitting large chips into multiple "small chips" that are independently manufactured and then integrated, Chiplet can not only effectively improve the manufacturing yield of high-end chips and reduce costs but also shorten the product launch cycle and accelerate heterogeneous integration innovation. The market generally believes that this is one of the optimal solutions to the challenges of high R & D and manufacturing costs in advanced processes. Therefore, driven by multiple factors such as breakthroughs in technological bottlenecks, the explosion of AI computing power, and cost-effectiveness, advanced packaging has become a key link in the semiconductor industry chain with increasingly prominent value.

In terms of market data, according to Coherent Market Insights, the global advanced chip packaging market is expected to grow from $50.38 billion in 2025 to $79.85 billion in 2032, with a compound annual growth rate of 6.8%. Yole Group is even more optimistic. They predict that the advanced packaging market will exceed $79.4 billion in 2030, with a compound annual growth rate of 9.5% from 2024 to 2030.

Dr. Bilal Hachemi, a senior analyst in the semiconductor packaging field at Yole Group, said, "Advanced packaging has consolidated its core position in the semiconductor value chain, not only reshaping the mass market but also deeply penetrating into highly sensitive application areas. Its development trajectory reflects a technology portfolio that widely empowers multiple industries."

As the market demand for advanced packaging continues to grow, governments around the world are paying increasing attention to it. In an environment of high geopolitical uncertainty, advanced packaging capabilities are becoming an important guarantee for the stability of a country's semiconductor industry chain.

Take the United States as an example. It is actively promoting the reshoring and development of the advanced packaging industry through a series of strong policies. The core of this strategy is the CHIPS and Science Act, which not only provides a huge subsidy of $52 billion for semiconductor manufacturing but also specifically allocates about $2.5 billion to support the R & D and capacity building of advanced packaging technologies. Through the issuance of notices of funding opportunities (NOFO) and other forms, it guides funds to key technology areas, aiming to build a self-sufficient domestic advanced packaging industry chain.

The fundamental reason for the introduction of these policies is that the United States wants to make up for the key short - board in its semiconductor supply chain. For a long time, the United States has dominated the chip design field and attracted a large amount of investment in front - end wafer fabs through policies, but the back - end packaging and testing link is heavily dependent on Asia. Therefore, the US government regards the development of domestic advanced packaging capabilities as an inevitable choice to ensure supply chain security, gain control over future technologies, and build a complete "end - to - end" industrial ecosystem from design, manufacturing to packaging.

With the dual support of the market and policies, the wave of capacity expansion in the advanced packaging industry has come as expected.

02 Crazy Capacity Expansion by Leading Companies

TSMC

TSMC is actively expanding its advanced packaging business. In its future plan, TSMC announced in March this year that it would make an additional investment of $100 billion in the United States, including building 3 new wafer fabs, 2 advanced packaging factories, and a large - scale R & D center. TSMC's two advanced packaging factories will be located in Arizona, named AP1 and AP2.

It is reported that AP1 will focus on expanding SoIC (system - on - integrated - chip) and CoW (chip - on - wafer) technologies, while AP2 will focus on CoPoS (chip - on - panel - on - substrate) to meet the local demand for AI and HPC chip packaging.

Recently, He Jun, the head of TSMC's advanced packaging, said that due to the increasingly short product launch cycles of AI customers, the demand for advanced packaging has become extremely urgent. This pressure has made it impossible for TSMC to deploy new production capacity according to the traditional "step - by - step" process.

He said that the time schedule for capacity construction has been significantly compressed from the original three years to one year or even nine months. Sometimes, production equipment needs to be installed in advance even when the technology development is not fully mature, adopting a method of simultaneous R & D and factory construction.

It is reported that TSMC's SoIC is likely to be adopted by Apple's next - generation M - series chips. AMD's next - generation EPYC processor, Venice, may also use TSMC's 2nm process and SoIC packaging. Meanwhile, NVIDIA's Rubin platform, which will be launched next year, will also adopt SoIC technology.

Samsung Electronics

Samsung Electronics initially planned to invest $44 billion in Taylor, Texas, USA, including a $7 - billion advanced packaging factory. However, due to poor performance at the end of 2024 and the failure to secure stable customers, the investment plan was scaled back, and the $7 - billion advanced packaging facility project was completely shelved.

The situation took a turn in late July 2025. On July 28, Samsung announced that it had signed a long - term AI semiconductor supply contract worth over $16.5 billion with Tesla. About ten days later, Samsung also signed an image sensor supply contract with Apple. After obtaining these two important orders, Samsung is currently planning to restart the previously shelved $7 - billion advanced packaging factory investment project.

Analysis shows that Samsung's strategic shift is based on a comprehensive consideration of multiple key factors. The most core driving force is that the large - scale orders from Tesla and Apple have solved the "customer uncertainty" problem that led to the project being shelved, providing a solid demand foundation for large - scale investment. Secondly, in the context of geopolitics and the "Made in America" policy, establishing a complete supply chain from front - end manufacturing to back - end packaging in the United States can not only avoid potential tariff barriers but also become an important strategic bargaining chip for Samsung.

ASE Technology

On August 12, ASE Technology announced that it would spend NT$6.5 billion to acquire the factory buildings and ancillary facilities of Win Semiconductor in the Southern Taiwan Science Park, Luzhu District, Kaohsiung City, aiming to expand its advanced packaging production capacity.

As the world's largest independent OSAT manufacturer, ASE Technology has never stopped its layout. Previously, ASE Technology Holding had invested $200 million to build its first 600×600 large - size fan - out panel - level packaging (FOPLP) production line. This production line will be installed in the third quarter of 2025 and is expected to start trial production by the end of the year. If everything goes smoothly, it is expected to start sending samples to customers for certification in 2026.

At the end of 2023, ASE Technology Holding leased the Nanzi factory of Fore Electronic in Taiwan, China, to expand the advanced packaging production capacity for AI chips. In August 2024, it acquired the K18 factory building of Hongjing Construction in Nanzi for building wafer bumping and flip - chip packaging production lines. In October of the same year, it started the groundbreaking project of the new K28 factory, focusing on CoWoS advanced packaging and testing. The project is expected to be completed in 2026.

On October 3, ASE Technology held a groundbreaking ceremony for the new K18B factory in Kaohsiung. It is understood that the factory is planned to have eight above - ground floors and two underground floors, with a total floor area of 60,000 square meters. The new K18B factory is expected to be completed and put into operation in the first quarter of 2028, creating nearly 2,000 jobs at that time.

03 Profound Changes in the Industrial Landscape

While technology is advancing and production capacity is expanding, the market landscape of advanced packaging is also changing.

Firstly, integrated device manufacturers (IDMs) are starting to take the leading position. As mentioned earlier, advanced packaging technologies represented by Chiplet and 2.5D/3D integration have become the key to driving the development of cutting - edge applications such as AI and high - performance computing due to their unique advantages in improving interconnection bandwidth, reducing power consumption, and achieving heterogeneous integration. This enhancement of strategic position has directly led to a change in the market's dominant force: traditional OSAT manufacturers are facing fierce competition from IDM manufacturers such as Intel and Samsung, as well as foundry manufacturers such as TSMC. The latter, with their synergistic advantages in design and front - end manufacturing, are playing an increasingly important role in the advanced packaging field.

Secondly, the cooperation and competition relationships within the industry are also presenting a new paradigm. The old linear and discrete supply chain model is being replaced by a more collaborative and networked ecosystem. For example, in the face of the shortage of high - end packaging capacity such as CoWoS, TSMC has chosen to outsource some of its orders to professional packaging and testing partners such as ASE Technology and Amkor, forming a new type of cooperative relationship of "joint capacity expansion and pressure sharing" to meet the explosive growth of market demand. Another change is the rise of "technology ecosystem alliances". For example, Intel has licensed its proprietary EMIB technology to Amkor for production, aiming to build a stronger and more diversified supply chain through shared innovation rather than a simple customer - supplier relationship. This strong collaborative mechanism can also help break through material and equipment barriers in the face of disruptive technologies such as CPO (co - packaged optics).

Overall, the advanced packaging supply chain is evolving towards a more resilient, regionally localized, and vertically integrated ecosystem, reducing its dependence on the traditional globalized and large - scale centralized procurement model. Bilal Hachemi pointed out: "We are witnessing the beginning of a new development cycle for advanced packaging. Industry leaders are reshaping their growth paths through major investments and strategic alliances, covering key areas such as consumer electronics, AI, and infrastructure."

04 Chinese Domestic Manufacturers are Making Efforts

Facing the "major changes" in the advanced packaging industry, domestic packaging and testing enterprises are also making efforts.

JCET

On the afternoon of August 21, JCET said at its 2025 semi - annual performance briefing that the company had been deploying technologies related to advanced packaging in its overseas and domestic R & D centers for many years. Currently, it is increasing its investment and capacity layout. This year's capital expenditure remains unchanged at the planned 8.5 billion yuan, focusing on advanced packaging projects and technological breakthroughs and investing in rapidly growing projects such as automotive electronics.

It is reported that JCET has mastered a full range of packaging technologies from wafer - level packaging (WLP), 2.5D/3D packaging, system - in - package (SiP), to flip - chip and wire - bonding, and can also provide advanced solutions for traditional packaging. Its application scenarios cover many fields such as automotive electronics, artificial intelligence, high - performance computing, and network communication.

The 2025 semi - annual report shows that according to the 2024 global outsourced semiconductor assembly and test (OSAT) list released by ChipInsights, JCET ranks third among the world's top ten OSAT manufacturers and first in mainland China.

TFME

In the first half of 2025, TFME achieved an operating income of 13.038 billion yuan, a year - on - year increase of 17.67%; and a net profit of 412 million yuan, a year - on - year increase of 27.72%. TFME is AMD's largest packaging and testing supplier, accounting for over 80% of its orders, and the two sides have formed a highly - bonded strategic partnership.

In 2015, TFME acquired 85% of the equity of AMD's packaging and testing factories in Suzhou and Penang. As of the end of the first half of 2025, there was still 1.127 billion yuan in goodwill on the company's books due to the acquisition. In the first half of the year, the net profit of the two AMD subsidiaries acquired by TFME had reached 726 million yuan.

In June 2025, AMD launched its new - generation Instinct MI350 series of products. Through in - depth cooperation, TFME has completed the process verification of the MI350 series of 3D packaging in advance and is expected to start small - batch production in the fourth quarter of 2025.

It is reported that in the first half of 2025, TFME has achieved large - scale mass production of mainstream advanced packaging technologies, such as flip - chip (FCCSP, FCBGA, etc.) products, with a yield rate as high as 98%. For the top - notch 2.5D/3D packaging technology applied in the AI field, the Nantong production project of the company has also been successfully filed.

Huatian Technology

In the first half of 2025, Huatian Technology achieved an operating income of 7.78 billion yuan, a year - on - year increase of 15.81%, and a net profit attributable to the parent company of 226 million yuan, a year - on - year increase of 1.68%. The operating income in the second quarter reached 4.211 billion yuan, a record high.

It is reported that Huatian Technology has mastered advanced packaging technologies such as SiP, FC, and TSV. The FOPLP project (Pangu Semiconductor project) has passed the verification of multiple customers, and some production lines were put into operation in 2025; the 2.5D/3D packaging production line has been connected, and the R & D of CPO technology has also been started. In August, it established a subsidiary, Nanjing Huatian Advanced Packaging, focusing on 2.5D/3D packaging.

On September 24, Huatian Technology announced that it planned to issue shares and pay cash to acquire Huayi Microelectronics under its controlling