Updated March 18th, 2024 at 07:33 IST

TSMC mulls advanced chip packaging unit in Japan: Report

The surge in demand for advanced semiconductor packaging, fuelled by the AI boom, has prompted firms like TSMC, Samsung, and Intel to ramp up their capacity.

Reported by: Business Desk
TSMC Japan expansion | Image:Reuters
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TSMC Japan expansion: Taiwan's TSMC is contemplating the establishment of advanced packaging capacity in Japan, potentially bolstering Japan's semiconductor sector rejuvenation efforts, news agency Reuters reported, quoting sources familiar with the matter.

Among the options being weighed by the semiconductor giant is the introduction of its chip on wafer-on substrate (CoWoS) packaging technology to Japan, as per the report.

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CoWoS, a high-precision technology involving chip stacking, promises enhanced processing capabilities, space efficiency, and reduced power consumption.

Presently, TSMC's entire CoWoS capacity resides in Taiwan.

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According to the report, no determinations regarding the scale or timeline of a prospective investment have been finalised.

The surge in demand for advanced semiconductor packaging, fuelled by the artificial intelligence boom, has prompted chipmakers like TSMC, Samsung Electronics, and Intel to ramp up their capacity.

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In January, TSMC's Chief Executive Officer, CC Wei, unveiled plans to double CoWoS output this year, with further increments slated for 2025.

Expanding advanced packaging capacity would extend TSMC's burgeoning presence in Japan, where recent endeavours include the establishment of a plant and the announcement of another, both situated on the southern island of Kyushu, a prominent chipmaking hub.

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TSMC's collaborations in Japan encompass partnerships with industry leaders like Sony and Toyota, with total investments in the Japanese venture anticipated to surpass $20 billion.

Furthermore, TSMC inaugurated an advanced packaging research and development center in Ibaraki prefecture, northeast of Tokyo, in 2021.

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Given Japan's leading position in semiconductor materials and equipment, coupled with burgeoning investments in chip fabrication capacity and a robust customer base, the country is poised to play a significant role in advanced packaging, according to a senior official at Japan's industry ministry.

However, TrendForce analyst Joanne Chiao suggested that if TSMC were to expand advanced packaging capacity in Japan, it might be on a limited scale.

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Chiao noted that the demand for CoWoS packaging within Japan remains uncertain, with the majority of TSMC's current CoWoS customers based in the United States.

TSMC's endeavors in Japan have received substantial support from the Japanese government, which views the semiconductor sector as crucial for its economic security after trailing behind South Korea and Taiwan.

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This support has attracted investments from various chip firms, including Intel, which is reportedly exploring the establishment of an advanced packaging research facility in Japan, the report said.

Samsung, on the other hand, is setting up an advanced packaging research facility in Yokohama, southwest of Tokyo, with government backing. The South Korean tech giant is also in discussions with Japanese and other companies regarding material procurement as it aims to adopt packaging technology used by its competitor, SK Hynix, for high bandwidth memory chips.
 

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Published March 18th, 2024 at 07:33 IST