Taiwan Semiconductor Manufacturing Company (TSMC) remains the world's sole provider capable of delivering a complete end-to-end Chip-on-Wafer-on-Substrate (CoWoS) packaging solution. For Chinese manufacturers, the question arises: what roles do front-end wafer fabrication and advanced packaging companies play, and which markets do they serve?
Samsung Electronics plans to introduce its own CoWoS-like packaging solution, branded as I-CUBE/H-CUBE. Leveraging its ability to supply both High-Bandwidth Memory (HBM) and CoWoS-style packaging, Samsung aims to compete with TSMC for orders. However, production capacity won't be available until after 2024, and the solution still requires customer validation.
CoWoS packaging technology and HBM integration
Considering the current AI GPU chip architectures from companies like NVIDIA and AMD, CoWoS packaging is essential for HBM integration. The generative AI boom has driven a surge in AI-HPC computing demand, leading to the emergence of "CoWoS-like" structures and a new industry division of labor: Chip-on-Wafer (CoW) + Wafer-on-Substrate (WoS).
In this model, TSMC manufactures the GPU wafer and interposer, completing the "Chip on Wafer" stacking and interconnection. The product is then transferred to OSAT providers to finish the "on Substrate" portion, packaging it onto a substrate.
According to Tencent Technology, Chinese manufacturers have some CoWoS capacity, primarily through CoW+WoS process integration. Advanced logic chips and interposers in China are mainly manufactured by SMIC and then outsourced to specialized OSAT providers like Tongfu Microelectronics and JCET for WoS packaging and testing.
The CoW+WoS Model: Industry Adaptation and Chinese Participation
Chinese AI chip designers with access to TSMC's services prioritize TSMC over SMIC. SMIC lags behind TSMC in advanced process nodes and interposer production, faces capacity constraints, and must support other Chinese manufacturers. In the front-end CoW process, SMIC can only "sufficiently supply."
Chinese OSAT providers are prepared for advanced process technologies and capacities. Beyond collaborating with SMIC on certain projects, they have more opportunities from TSMC's overflow orders, similar to Amkor and ASE, catering to non-Chinese AI-HPC computing demand.
UMC and GlobalFoundries (GF) can also provide silicon interposer manufacturing. UMC has recently stated its intention to focus on HPC interposers and back-end advanced packaging for AI applications. While not explicitly targeting HPC interposer opportunities, GF has been expanding its presence in the Chinese market. The company recently announced a change in leadership for its China operations, a move that merits close attention for potential future developments in this area.
TSMC's CoWoS Dominance and Emerging Competition
Although CoWoS doesn't require extremely advanced technology, high yield is especially crucial for packaging HBM-equipped AI chips. Low packaging yields result in irrecoverable losses of stacked devices like HBM.
Currently, only TSMC can balance advanced process nodes with high yields. However, Samsung is eyeing a slice of this lucrative market, and Intel's Foveros packaging solution is worth watching for potential market entry.
Companies like Amkor, ASE, and Chinese firms Tongfu Microelectronics and JCET are vying for CoWoS overflow opportunities as TSMC's capacity tightens. However, capacity suitable for advanced computing chip processes with high yields remains limited, which is key to TSMC's continued dominance in attracting orders.
The industry views CoW+WoS as a reasonable division of labor, with an increasing number of "CoWoS-like" supply chains emerging. Chinese front-end advanced process logic chip and silicon interposer capacity remain at a level of being "sufficient." As for back-end WoS packaging and testing, Chinese providers can handle both domestic and international overflow orders, but mature yields continue to play a crucial role in their competitiveness.
