CoWos Packaging Driving Growth in Advanced Packaging Equipment
Chip-on-wager-on-substrate (CoWos) packaging technology has taken the packaging business by storm, with TrendForce reporting growth in advanced packaging growth of more than 10% in 2024. What is important, this trend could even surpass 20% in 2025.
Where’s this growth coming from? The world’s biggest semiconductor manufacturers and the AI server market are expanding to market demand. Doing this means investing in state-of-the-art packaging technologies like CoWoS, but also SoIC and InFO.
The New Semiconductor Industry Era
Worldwide, new facilities are being built to provide the packaging the semiconductor industry needs to serve the AI market. We’re already seeing TSMC investing in its advanced packaging capacity across Taiwan, including in Chiayi, Tainan, Zhunan, and Taichung.
Across the Pacific, Intel is making moves to keep up, with new operations growing in New Mexico, USA. But it’s not just the semiconductor manufacturing business responding to this new trend. Memory suppliers like Micron and Samsung are investing in their operations from Singapore to the U.S.
Key Growth Driver in Taiwan
One of the reasons suppliers in Taiwan and beyond are investing in advanced packaging equipment is the lower barrier to entry compared to front-end process equipment. This extends to products like:
· Thinning machines
· Ball placement machines
· Marking machines
· Molting machines
· Electroplating machines
Since front-end processes are dominated by European, American, and Japanese companies, Taiwanese manufacturers are instead moving in another direction, with the likes of TSMC working with local suppliers to establish reliable supply chains and cut costs.
It also helps that Taiwan already has a global reputation for the development, manufacturing, and deployment of machine tools. This expertise lends itself well to the shift to advanced packaging technologies, as the talent is already there.
However, the challenge for the Taiwanese market is expanding its production capacity to keep up with the emerging advanced packaging equipment market. If it can take advantage of these opportunities, it will have an enormous opportunity to carve out shares in foreign markets and build relationships with semiconductor manufacturers worldwide as an early market entrant.
