What is still missing amid the advanced packaging capacity expansion boom?
The growing demand for AI computing power and high-end storage has driven a new round of large-scale capacity expansion in the advanced packaging industry at home and abroad. The total investment of the entire industry, including Chinese mainland manufacturers such as JCET, TFME, Hua Tian Technology, Yongxi Electronics, Sino-Japan Semiconductor, Shenzhen Kaifa Technology and Biwin Storage, has exceeded 400 billion yuan. The capacity expansion is mainly focused on advanced technologies such as 2.5D/3D packaging, Chiplet and HBM.
However, investment is only the starting point. From the completion of plant construction and equipment in place, to the production lines passing customer certification, stable yield and forming profitable production capacity, there are still many links that take time. With huge capital invested, production capacity cannot keep up easily. The domestic supply chain will benefit from this, but the timing and extent of benefits vary greatly across different links. Orders do not equal revenue, sample delivery does not equal mass production, and capacity expansion of packaging and testing plants does not mean that the domestic market share will increase simultaneously.
Hundred-billion-yuan capital expenditure flows to 2.5D/3D and HBM
JCET has the largest investment in this round. Recently, the board of directors of JCET reviewed and approved the "Proposal on Mid-term Adjustment of the Company's 2026 Investment Plan", planning to raise the 2026 investment plan from 11.01 billion yuan to 18.2 billion yuan, of which fixed asset investment will be raised from 9.98 billion yuan to 17.31 billion yuan. The additional investment is mainly used for the construction of production lines related to advanced packaging. JCET plans to build a high-end advanced packaging and testing factory in Lingang, Shanghai in two phases, with a total investment of 7.8 billion yuan. JCET also plans to raise no more than 6.5 billion yuan through private placement for projects including capacity expansion of high-end advanced packaging platforms for high-performance computing, capacity upgrading of advanced packaging and testing for high-end power modules, upgrading and capacity expansion of advanced process platforms for wafer-level packaging, and upgrading of system-level packaging and testing capabilities for high-density and large-capacity storage chips.
The capacity expansion of TFME is mainly centered on the high-end AI packaging and testing demand of its core customer AMD. In May 2026, the second phase of Tongfu AMD Suzhou project was launched, and Lisa Su, CEO of AMD, attended the event in person; just a few months ago, the company announced that it planned to raise no more than 4.4 billion yuan to invest in four high-end packaging and testing fields: storage, automotive electronics, wafer-level and high-performance computing. The pace of capacity expansion is clearly accelerating. In 2026, the company plans to invest 9.1 billion yuan in capacity construction, a significant increase from 6 billion yuan in 2025.
Hua Tian Technology is based on storage packaging and testing. Its holding subsidiary Hua Tian Nanjing invested 3 billion yuan to build the second phase of the advanced packaging and testing industrial base project, which is expected to encapsulate and test about 430 million storage integrated circuits per year after reaching full production. The construction period of the project is 2 years, from June 2026 to May 2028. It is estimated that the annual operating revenue after reaching full production will be 2.15 billion yuan, with a net profit of 126 million yuan. Hua Tian Technology said that this project investment is an important measure for the company to further expand its business layout of storage integrated circuit packaging and testing and comply with the rapid development of the industry. The products of the project are mainly used in fields such as artificial intelligence computing power, servers, consumer electronics, intelligent terminals, automotive electronics and data centers.
Among other enterprises, Sino-Japan Semiconductor plans to invest 10 billion yuan to build the first phase of the 3D integrated chip manufacturing project, aiming at mass production of 3DIC; Yongxi Electronics announced two investments at home and abroad within half a year, totaling 12.4 billion yuan, including the 2.5D product line; the subsidiary of Shenzhen Kaifa Technology plans to invest 1.85 billion yuan to expand the packaging and testing capacity of high-end storage chips.
It is worth noting that it is not only traditional packaging and testing plants that are expanding capacity. Guangdong Xincheng Hanqi, a holding subsidiary of storage manufacturer Biwin Storage, plans to sign the third-phase cooperation agreement for the wafer-level advanced packaging and testing manufacturing project with the Management Committee of Songshan Lake, Dongguan, with a total investment of about 4.5 billion yuan, including 4 billion yuan of fixed asset investment. The planned investment of 3.09 billion yuan for the first and second phases has been completed, corresponding to a monthly production capacity of about 3,000 wafers.
Capacity expansion encounters bottlenecks in equipment, materials, talents and certification
However, capital expenditure is only the first step of capacity expansion. If any link of plant, equipment, materials, talents and customer certification gets stuck, the investment cannot be converted into production capacity. The special feature of this round of capacity expansion boom is that the demand comes so suddenly that every link of the supply chain is not fully prepared.
The first is the problem of plant and equipment delivery. The requirements of advanced packaging for clean rooms and space far exceed those of traditional packaging. Building a high-end clean room from scratch usually takes more than 18 months, and ready-made high-quality plants have become scarce resources. A more widespread problem is equipment delivery lead time: as packaging and testing manufacturers around the world are expanding capacity, the delivery lead time of some core advanced packaging and testing equipment has been extended to more than 1 year, and the lead time of ordinary equipment has also been extended from 3-6 months to 6-8 months. The increasing complexity of AI chips is also amplifying equipment demand. Data from Morgan Stanley shows that the test time of a single GPU has extended from about 350 seconds for the Hopper architecture to 700-1000 seconds for the Blackwell architecture, and the next generation is expected to reach 1800-2000 seconds; the number of pins on the test socket has also surged from about 1,500 for traditional mobile phone chips to 6,000 for AI chips, and the next generation will exceed 10,000. More critically, the localization rate of key equipment such as hybrid bonding, high-end lithography and high-precision testing is still relatively low, and several of the most core types of equipment are still highly dependent on imports, so the supply rhythm is not completely controlled by domestic enterprises.
The second is the problem of materials, which goes far beyond ABF substrates. More than 95% of the global ABF build-up films for advanced packaging substrates, especially ABF substrates, are supplied by Ajinomoto of Japan, and part of the production capacity has been booked up to 2027. In August this year, Ajinomoto notified Chinese mainland customers to cut the supply of ABF films by 30%. The supply cut directly pushed the domestic IC substrate and AI chip packaging industry chain into a tense state. At the same time, the extreme requirements of AI servers and high-speed switches for signal transmission have triggered a "super cycle" for high-end copper clad laminates: the supply of HVLP low-profile copper foil and low-dielectric electronic cloth, the core upstream materials, is in urgent shortage. The global delivery cycle of Toyota Industries, which produces electronic cloth, exceeds one year. The delivery period of high-end copper clad laminates has been generally extended from the normal 7 days or so to 15-20 days, and some special part numbers need to wait for more than 6 weeks. From equipment procurement, commissioning to customer certification, capacity expansion of materials usually takes 18 to 24 months. The pace of capacity expansion of packaging and testing plants is obviously restricted by the upstream single supplier and oligopoly pattern in the material sector.
In terms of talents, advanced packaging requires interdisciplinary talents who understand architecture, packaging and interconnection at the same time. At present, it is estimated that there are only 200 to 300 architects in China who meet the requirements of "more than 10 years of experience and rich experience in large-scale computing AI or GPU Chiplet projects", and most of them have been recruited by leading enterprises. The number of new jobs related to advanced packaging has increased by 134.6% year-on-year, and the number of Chiplet-related positions has increased by 211.2% year-on-year, but such talents cannot be cultivated through short-term training. The shortage of talents will not directly reduce the number of production capacity, but will slow down the progress of production line commissioning, customer certification and yield improvement.
The last part is customer certification and yield improvement. To move from verification to large-scale mass production, advanced packaging needs to go through multiple links such as customer certification, yield ramp-up and reliability verification, and the popularity of the concept does not equal the current performance. TrendForce predicts that the severe shortage of global 2.5D packaging capacity will not begin to ease slightly until 2027. Before that, a large amount of CoWoS capacity and key materials locked by NVIDIA with its supply chain control power have made other tech giants face material shortages and limited product growth. The same is true in China: the 2.5D packaging of Yongxi Electronics is still in the stage of sample delivery and verification, and has not yet entered large-scale mass production; the wafer-level packaging and testing line of Biwin Storage is still in the stage of process verification and small-batch trial production; the realization rhythm of TFME's high-end production capacity also largely depends on the import progress of AMD, its core customer. These factors will not change the direction of continued expansion of domestic advanced packaging, but will affect the speed of converting investment into effective production capacity and the time of profit release.
The equipment delivery lead time brings a time delay of several months to more than one year, which may cause nearly half of the current production capacity to be postponed for a single project. The ABF substrate brings actual production capacity loss, and the gap ratio is expected to expand year by year. This part of the loss cannot be solved by the efforts of the packaging and testing link itself. Talents and certification affect the speed of yield ramp-up, making the formation of effective production capacity lag behind the arrival of equipment for a period of time.
Domestic Supply Chain Benefits: Hierarchical Rhythm and Differentiated Realization
The flip side of the coin is that the tighter the supply and the more urgent the capacity expansion, the larger the window for the domestic supply chain to be introduced. The bottleneck restricts the capacity rhythm of packaging and testing plants, but opens up opportunities for domestic equipment and materials to increase in volume. However, the transmission of this opportunity in different links has different speeds.
The orders and revenue realization in the equipment sector are the fastest. Huahai Qingke's thinning and polishing integrated machine has been shipped more than 20 units in total, and has obtained repeated orders from many leading enterprises. The new 12-inch advanced storage thinning equipment Versatile-GH300, compound wafer thinning equipment Versatile-GN200 and 8-inch ring-retaining wafer thinning machine Versatile-GR200 have all completed the first shipment, of which GR200 has been delivered to customers. The domestic mechanical dicing equipment of Guangli Technology continues to operate at full capacity, and has obtained batch repurchases from leading domestic packaging and testing manufacturers. The wafer-level direct-write lithography equipment of Coretronic Micro-installation has passed the verification of the CoWoS-L production line of leading packaging and testing plants, realizing the first large-scale introduction of domestic direct-write equipment into the high-end AI chip packaging production line, and has obtained repeated batch orders. However, some other links are still in the early stage. The hybrid bonding equipment of Tuojing Technology achieved a revenue of 136 million yuan in 2025, accounting for only about 2% of the company's annual revenue. The truly solid beneficiaries are those sub-categories that have entered the production lines of leading customers and obtained repeated orders, rather than all companies involved in advanced packaging equipment.
The overall revenue of the material sector is growing rapidly, but the profit transmission is slower than that of equipment. In the first half of 2026, the total revenue of 12 listed packaging material companies was about 70.1 billion yuan, and the proportion of advanced packaging materials in the global packaging material market rose from 37.93% in 2023 to 42.45% in 2025. The epoxy molding compound of Huahai Chengke has entered the advanced computing power packaging, with a year-on-year revenue growth of 161.77%, and its revenue in the first half of the year has exceeded that of the whole year of 2025; Youyan New Materials and Kangqiang Electronics maintain a growth rate of more than 50%; the EMC epoxy molding compound and solder balls of Feikai Materials have achieved stable mass production, and the thick film negative photoresist has obtained verification from mainstream packaging plants and formed small-batch orders. It is worth extra attention that the tight overseas supply of high-end copper clad laminates has opened a key window for domestic HVLP copper foil and low-dielectric electronic cloth: large copper clad laminate manufacturers have begun to actively support domestic suppliers and accelerate testing and certification, which is a rare "demand-driven" opportunity in localization. But in general, the material verification cycle is longer, and batch stability and long-term reliability certification cannot be accelerated by capital. It usually takes several quarters or even longer from small batch to large-scale procurement. The current revenue growth of material companies may come more from the simultaneous increase in volume and price of mature categories under the industry boom, and the profit contribution of new advanced packaging categories will be slower.
Within the material sector, ABF substrates are a special variety: the link with the largest long-term space but the thinnest short-term revenue. The ABF substrates of Shennan Circuits have been shipped in batches on the flagship CPUs of AMD, Intel and Qualcomm, becoming the only enterprise in China that has the high-end ABF substrate technology and has opened up overseas large customers; the FC-BGA packaging substrates with 22 layers and below in the Guangzhou factory have been mass-produced, and the R&D and sampling of 24 layers and above are progressing as scheduled. The mass production of 22 layers means that domestic substrates have stepped into the AI chip-level threshold.
Summary
This round of capacity expansion has a clear driving effect on the domestic supply chain, but not all links can benefit simultaneously. The orders and revenue in the equipment sector are realized first, among which the truly solid categories are thinning, dicing, direct-write lithography and other categories that have entered repeated procurement, while hybrid bonding and advanced packaging measurement are still in the stage of development from 0 to 1. The revenue of the material sector is growing rapidly, but new advanced packaging categories need to pass verification first, and profit transmission is slower than revenue; high-end copper clad laminates and their upstream copper foil and electronic cloth have ushered in a demand-driven domestic import window due to the tight overseas supply. ABF substrates have a large long-term space, but the short-term revenue volume is still small. The breakthrough of Shennan Circuits in overseas customers and the capacity ramp-up of Xingsen Technology represent different paths, and the common point is that both require time.
This article is from the WeChat official account "Semiconductor Industry Panorama" (ID: ICViews), written by Peng Cheng, and published with authorization from 36Kr.