The surging global demand for AI chips is straining advanced packaging capacity, driving a sharp focus on fan-out panel-level packaging (FOPLP) within Taiwan’s semiconductor industry. According to a report by Commercial Times, major packaging and testing firms such as ASE and Powertech, alongside equipment manufacturers like Gudeng, GPTC, E&R Engineering, Mirle, and analysis firm MAtek, are investing heavily in FOPLP technology.

The rapid development and expanding applications of AI chips have intensified the need for higher chip performance, smaller sizes, better heat dissipation, and lower costs. As emerging applications such as 5G, AIoT, and automotive chips continue to grow, the demand for high-performance, high-power semiconductors has surged. FOPLP technology, which enhances performance while significantly cutting costs and addressing thermal and signal integration issues, is emerging as a key trend in the market.

ASE has been working on panel-level packaging for several years. The company expects its panel-level packaging equipment to be in place by the second quarter of 2025, maintaining a technological edge. On October 2, ASE announced a nearly NT$8 billion purchase of equipment by its subsidiary, SPIL, from companies including Advantest.

Powertech has already moved into wafer-level fan-out packaging and is now shifting toward panel-level fan-out packaging. The company claims that the new technology can increase chip area output by two to three times. It has dedicated its Hsinchu plant to panel-level fan-out packaging and TSV CIS, positioning itself for future growth opportunities.

Equipment manufacturers are also seeking to capitalize on this trend. GPTC, a supplier to major foundries for InFO packaging, is expected to benefit from future FOPLP opportunities due to the similar nature of its equipment. Gudeng Precision is developing panel-level packaging transport boxes, with mass production expected in 2025.

FOPLP combined with TGV drilling is seen as the key to this technology. Analysts cited by Commercial Times highlight that FOPLP+TGV enables higher area utilization and unit capacity, which effectively reduces heterogeneous packaging costs.

E&R Engineering is focusing on drilling, testing, and cutting equipment for glass substrates, primarily supplying panel manufacturers in Taiwan and outsourced assembly and testing providers in Southeast Asia. Mirle has targeted glass substrate transport equipment, while MAtek is leading the market in glass substrate inspection technology.

(Photo credit: ASE)

The competition between Samsung and TSMC has intensified not only in securing international IC design clients but also in the field of South Korean IC design companies. According to a report by ZDNet Korea, major South Korean AI semiconductor fabless companies, which previously used Samsung’s foundry facilities, are now diversifying their manufacturing by using TSMC’s fabs for new chip mass production.

Industry sources cited by ZDNet Korea reveal that FuriosaAI initially used Samsung’s 14nm process for its first-generation chip, “Warboy,” but switched to TSMC’s 5nm process for its second-generation chip, “Renegade.” Notably, Renegade became the first chip in South Korea’s AI semiconductor sector to utilize 2.5D packaging technology with CoWoS and HBM3 memory. FuriosaAI is also planning to use TSMC’s 5nm process for its next-generation chip, “RenegadeS,” set to launch in the fourth quarter.

Similarly, DeepX, after using Samsung’s foundry process, adopted TSMC’s technology for its latest chip development this year. The company’s “DX-V3” system-on-chip (SoC) is being developed using TSMC’s 12nm process, with a target to release samples later this year. DeepX’s earlier chips, the “DX-M1” AI accelerator and “DX-H1” AI server accelerator, were produced using Samsung’s 5nm process, while the “DX-V1” AI SoC solution was made with Samsung’s 28nm process. The “DX-M1” entered mass production last month. ZDNet Korea also reports that DeepX is currently discussing with Samsung the development of next-generation chips using processes more advanced than 5nm.

Another South Korean IC design company, Moblinet, is utilizing both Samsung and TSMC’s foundry services. Its first-generation chip, “Eris,” was manufactured using Samsung’s 14nm process and began mass production in March this year. The second-generation chip, “Regulus,” is being produced using TSMC’s 12nm process and is expected to launch next year after completing testing.

ZDNet Korea also cites industry experts who emphasize that Samsung’s foundry services need to not only focus on attracting large clients but also improve services for smaller fabless companies. Similar to how TSMC grew by nurturing partnerships with small fabless firms, Samsung should bolster its process technology and develop an ecosystem for IP and fabless companies.

According to TrendForce data, TSMC maintained a global foundry market share of 62.3% in the second quarter of this year, while Samsung held an 11.5% share.

Meanwhile, in the race for major international client orders, WCCFTECH reports that Qualcomm is pursuing a dual-sourcing strategy for its Snapdragon 8 Gen 5 chip, partnering with both TSMC and Samsung. Qualcomm has previously attempted this approach, but Samsung’s inconsistent yields thwarted the plan. Qualcomm is now reportedly considering TSMC’s 3nm ‘N3P’ technology for the high-performance variant of the Snapdragon 8 Gen 5, while Samsung’s SF2, also known as 2nm GAA, is expected to be used for a lower-end version.

(Photo credit: TSMC)

While Taiwanese foundries are reportedly facing price pressure in mature nodes and are said to be offering discounts, TSMC is also rumored to mull about offering discounts to its customers on mature nodes, particular for 7nm and 14nm, a report by Commercial Times indicates.

Sources cited by the report suggest that the foundry giant’s latest move would be a countermeasure to the competition from Samsung and other Chinese foundries.

A previous report by the Economic Daily News notes that local foundries in Taiwan, such as United Microelectronics Corp. (UMC), Vanguard International Semiconductor Corp. (VIS), and Powerchip Semiconductor Manufacturing Corp. (PSMC), are already offering discounts on mature process orders in the fourth quarter, marking a shift from the relatively stable pricing seen in the third quarter.

Now, TSMC seems to follow suit. The report by Commercial Times indicates that this move will boost capacity utilization for TSMC’s mature processes, while offsetting the risk of declining average selling prices (ASP) due to heated competition.

Looking ahead to next year, the pricing pressure on mature processes will likely persist, as TSMC may lead the way in offering discounts for some of its mature nodes, the report notes. Volume would reportedly play a key role in securing discounts, as TSMC may allow more flexibility in pricing with massive orders.

It is worth noting that Chinese foundries, which had previously been aggressive in cutting prices, have held firm this time. As these companies are struggling to make profit, they have signaled potential price increases, according to the report.

Therefore, it is indicated that certain Taiwanese IC design companies have increased their orders with local foundries. By working on price negotiations with different suppliers, they can further optimize their cost structure.

Sources in the supply chain cited by the report also indicate that in the past, Taiwanese foundries were often forced to follow their Chinese rivals in cutting prices due to aggressive competition. However, as Chinese manufacturers have been gradually balancing their supply and demand, Taiwanese companies hope to seize this opportunity by offering greater pricing flexibility this time, allowing their customers to negotiate based on the volume to expand market share and boost capacity utilization.

The other three major foundries in Taiwan, as mentioned above, had seen their utilization rates rising above 70% in the third quarter, the report suggests. However, if the foundries aim to further increase their capacity utilization, they will inevitably need to move away from the relatively passive order-taking strategies they used to adopt.

In terms of the market demand in 2025, sources from IC design firms cited by the report note that there may still be room for price adjustments. For now, the demand for advanced nodes, which are driven by AI and smartphones, seems to remain solid. However, the demand from automotive and industrial control sectors has yet to show a clear recovery, which may be inferred from the moderate price discounts offered by Taiwanese manufacturers, according to the report.

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• [News] Weak Demand Drags Down Semiconductor Mature Process Pricing, May Decline for Two Quarters

(Photo credit: TSMC)

On September 30, according to an announcement on the China Securities Regulatory Commission’s website, Wuhan Xinxin Semiconductor Manufacturing Co. (XMC) has had its IPO application for the STAR Market officially accepted, marking the official start of its listing process.

According to a report by ICsmart, both Yangtze Memory Technologies (YMTC) and XMC are subsidiaries of the holding company Yangtze Memory Technologies Group.

ICsmart reports that XMC, founded in 2006, is a semiconductor manufacturer focused on NOR Flash memory chips and operates the first 12-inch semiconductor production line in Central China. By the end of 2017, XMC had shipped over 750,000 NOR Flash wafers, covering markets ranging from consumer electronics to industrial and automotive-grade applications, and that year achieved profitability. In 2020, XMC announced full-scale mass production of its self-developed 50nm SPI NOR Flash products.

According to information from XMC’s official website, the company currently offers 12-inch NOR Flash, CIS, and Logic wafer foundry services, with process nodes of 40nm and above.

ICsmart also notes that YMTC, the largest NAND Flash manufacturer in China, successfully developed China’s first 3D NAND flashy in October 2017 through a combination of independent R&D and international collaboration. In 2019, YMTC began mass production of 64-layer 3D NAND based on its Xtacking architecture. By April 2020, YMTC announced the successful development of 128-layer 3D NAND, with its X2-6070 model being the first third-generation QLC flash, boasting the industry’s highest I/O speed, storage density, and single-chip capacity at the time of its release.

In 2022, YMTC was reported to have entered Apple’s iPhone supply chain, providing NAND for the iPhone SE3. However, later that year, the U.S. imposed stricter export controls on Chinese semiconductors, adding YMTC to the Entity List, which has impacted the company’s development.

(Photo credit: XMC)

According to TrendForce’s latest memory spot price trend report, regarding DRAM, with China’s upcoming National Day holiday and the lack of restocking momentum, the spot market is expected to become quieter in the next two weeks, causing the spot prices continue to slide. As for NAND flash, another wave of inventory reduction has surfaced among module houses. Combined with the relatively high inventory of YMTC, the spot market is surrounded by pressure of sales. Details are as follows:

DRAM Spot Price:

The previously mentioned influx of reball DDR4 and DDR5 chips (from decommissioned modules) is still unabated, and most major module houses are compelled to cut prices due to inventory pressure. With China’s upcoming National Day holiday and the lack of restocking momentum in the earlier period, the spot market is expected to become quieter in the next two weeks. Therefore, spot prices will continue to slide as well. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 1.28% from US$ 1.959 last week to US$1.934 this week.

NAND Flash Spot Price:

Another wave of inventory reduction has surfaced among module houses amidst the supposedly peak season, followed by an ongoing decrement of prices, where most sellers equipped with ample stocks are looking to maintain their operations by exchanging their inventory with cash. All the while, YMTC has managed to drop in inventory by rushing to ship out its products to some major module houses at lower prices also due to the pressure aroused by excessive inventory. The spot market is thus lingering amidst pressure of sales. Spot prices of 512Gb TLC wafers have dropped by 3.69% this week, arriving at US$2.610.