US-China CHIP WARS Now Encompass Advanced Packaging
In the Aug 21st issue of Asia Times, Scott Foster wrote an interesting article entitled “Advanced IC Packaging is Next Front in the Chip Wars”; certainly something we all see happening.
Certainly, IFTLE agrees that advanced IC packaging is the new source of competition among manufacturers of AI processors and other advanced integrated circuits (ICs). As such, advanced packaging has emerged as the next area for the U.S. government’s efforts to reduce America’s dependence on foreign suppliers (significant funding for on shore advanced packaging can be found in the CHIPS ACT) and block China’s technical progress by blocking their access.
Foster points out that while “front-end” IC wafer fabrication sanctions have seriously interfered with China’s advance, “back-end” assembly/packaging is an area where China had already obtained a large market presence, making it more difficult for US attempts to block their access to advanced packaging technology.
China has a very large and advanced IC packaging industry. Two of the world’s top five outsourced semiconductor assembly and test (OSAT) companies are tied to mainland China – JCET (3rd) and Tongfu Microelectronics (4th), while other smaller companies are also developing. Tongfu has provided OSAT services to AMD for many years and operates joint-venture factories with it in Suzhou and Penang (Figure 1).
With Taiwan’s TSMC being the world’s largest and most technologically advanced IC foundry, and rapidly becoming the leader in advanced packaging as well, any takeover of Taiwan by the Chinese mainland could have severe impact on US access to state of the art (SOTA) advanced packaging for technologies such as AI processors.
Huawei has used IC design and packaging technology to reportedly move beyond the Nvidia chips the US Commerce Department has allowed Nvidia to sell there. Asia Times notes that “Even if Huawei is overstating its capability, it appears to have made enough progress to put Nvidia, AMD and Intel in danger of losing their AI processor positions in the Chinese market.”
Alibaba, Baidu, ByteDance, China Mobile, Tencent and other Chinese customers who might have preferred to buy the more advanced US-designed processors may now find it easier to use devices designed and made in China.
TSMC CoWoS Technology
Asia Times reporting data from industry sources indicates that monthly production of ICs using TSMC’s CoWoS advanced packaging for computing, data centers and telecom equipment, will hit 40,000 units/mo by the end of this year, increasing to 60,000 in 2025 and 80,000 by the end of 2026.
CoWoS “is particularly well-suited for artificial intelligence (AI) accelerators, where multiple types of chips need to work together efficiently” – including high-bandwidth memory (HBM).
As it ramps up CoWoS production capacity, TSMC should be able to catch up with the backlog of orders for Nvidia’s H100 processors and be ready to roll out its new Blackwell B200 processors, expected to start early next year.
Huawei’s IC design division HiSilicon “conducted a comprehensive assessment of CoWoS in 2014, and decided to take the lead in adopting the technology”. Huawei HiSilicon worked with TSMC starting with 16nm logic chips to 7nm in 2019. That progress ended in 2020 when the US sanctioned Huawei and forced TSMC to cut it off from the latest technologies.
Chiplets
The Chinese government sees advanced IC packaging in general and chiplets in particular as key to overcoming US sanctions and making the Chinese semiconductor industry both competitive and independent.
Huawei / HiSilicon which had years of experience implementing the CoWoS concept has reportedly amassed hundreds of patents covering chiplet technology. Chiplets are reportedly enabling the Chinese to circumvent US restrictions on exports of advanced semiconductor production equipment that have so far prevented them from advancing beyond 5nm.
Chips Act
US Commerce Secretary Gina Raimondo, has noted that “One of the fundamental goals of the CHIPS and Science Act is creating an advanced packaging ecosystem in the US to ensure full start to finish chip production occurs domestically… “ Among other programs, it plans to subsidize the construction of Amkor’s first OSAT facility in Arizona.
The US administration has reportedly been considering the restriction of chip assembly and packaging equipment exports to China. But it does not appear to have made much progress so far, perhaps because most of this equipment is made in Japan. Japan is reportedly resisting the latest US request to further tighten sanctions on China. At its Japan 3DIC R&D Center located in the science city of Tsukuba northeast of Tokyo, TSMC is developing advanced 3D packaging technology with more than 20 leading Japanese materials and equipment companies.
For all the latest on Advanced Packaging stay linked to IFTLE………………
