The AI boom has boosted the semiconductor industry, increasing the demand for advanced packaging production capacity. According to a report in Economic Daily News, TSMC is rumored to be considering the acquisition of another Innolux plant, particularly its 7th plant in the Southern Taiwan Science Park. However, on October 29, Innolux stated that there are currently no plans to sell the entire plant.

In August this year, TSMC purchased Innolux’s 4th plant in Tainan for NTD 17.14 billion, naming it AP8. It is rumored that TSMC intends to buy another of Innolux’s plants, specifically considering the acquisition of its 7th plant, which is adjacent to the 4th plant that TSMC previously acquired.

However, the report indicated that the management at Innolux holds differing opinions on the sale of its 7th plant and has been unable to reach a consensus.

Innolux’s 7th plant features a 7.5-generation production line primarily dedicated to manufacturing TV panels, and various energy-saving, water-saving, and waste reduction measures were implemented, as mentioned by the report.

As for the plant that TSMC previously acquired from Innolux, the AP8, according to a report by China Times, is expected to start production in the second half of 2025. More importantly, the fab will not only provide foundry services but also the eagerly needed capacity for advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services, as the report noted.

The move will be critical for TSMC to meet the surging demand for the advanced packaging capacity for AI servers, according to the report. Its future capacity will reportedly be nine times that of AP6, TSMC’s advanced packaging fab in Zhunan, as the report from China Times noted.

Regarding the current situation of Innolux, its Q3 financial report showed disappointing results. According to a report from Commercial Times, the company recently announced its financial performance for the third quarter of 2024. Due to a decline in TV panel revenue, Innolux recorded a net loss.

According to its press release, consolidated revenue for the third quarter was NTD 55.473 billion, a quarter-on-quarter decrease of 2.4%, while the gross profit margin fell to 9%. The company posted a net operating loss of NTD 790 million, with net profit of approximately NTD 494 million, resulting in a net profit per share of about NTD 0.05.

In 3Q24, the company shipped 6.08 million square meters of total panel, a decrease of 9.3% quarter-on-quarter.

According to its press release, looking ahead to the fourth quarter of 2024, Innolux noted that the timing has entered the traditional off-season for panels. However, China’s new subsidy policy may boost the demand for TV sets. While TV panel prices are expected to remain stable, demand for IT panels is anticipated to slow down.

According to the Commercial Times report, Innolux projects that shipments of large-size panels will decrease by 5% to 9% in the fourth quarter, with the average unit price of shipments declining by less than 5%. In contrast, shipments of small and medium-sized panels are expected to grow by 15% to 19%.

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• [News] TSMC’s Newly Acquired AP8 Facility in Southern Taiwan Rumored to Start Production in 2H25
• [News] TSMC Acquires Innolux’s Plant in Southern Taiwan to Expand Advanced Packaging Capacity

(Photo credit: TSMC)

In mid-August, TSMC had signed a contract with panel manufacturer Innolux to purchase its plant and facilities located in southern Taiwan, eyeing to further expand its advanced packaging capacity. According to a report by China Times, the fab, designated as the AP8 facility, is expected to start production in the second half of 2025.

More importantly, the fab will not only provide foundry services but also the eagerly needed capacity for advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services, the report notes.

The move will be critical for TSMC to meet the surging demand for the advanced packaging capacity for AI servers, according to the report. Its future capacity will reportedly be nine times that of AP6, TSMC’s advanced packaging fab in Zhunan.

Outbidding Micron, TSMC secured the plant with a transaction value of NTD 17.14 billion, which is much lower than the rumored market price of over NTD 20 billion. Citing sources from the supply chain, the report suggests that the main reason TSMC acquired Innolux’s fab was to bypass the time-consuming environmental assessment process.

Unlike the advanced packaging fab in Chiayi, central Taiwan, which has to be started from scratch, the newly-acquired facility only requires internal modifications. Within a year, TSMC can finish the job of equipment installation, and begin the production afterwards.

Sources cited by the report note that orders for related equipment manufacturing are already underway, with deliveries expected starting in April next year. While the process of trial production may take an additional quarter, the AP8 facility is expected to start production in the second half of 2025.

During an investor conference in mid-April, TSMC Chairman C.C. Wei stated that he anticipates the company’s CoWoS capacity to more than double in both 2024 and 2025. He noted later in July that TSMC targets to reach the balance between supply and demand by 2026.

According to analysts cited by the report, TSMC’s CoWoS capacity, though still remains in short supply, could exceed 32,000 wafers per month by the end of this year. With the additional outsourced capacity, the total CoWoS capacity may approach 40,000 wafers per month. By the end of 2025, TSMC’s CoWoS monthly capacity is projected to reach around 70,000 wafers.

Citing remarks by Jun He, TSMC Vice President of Operations and Advanced Packaging Technology and Service, TSMC’s CoWoS capacity is expected to achieve a compound annual growth rate (CAGR) of over 50% from 2022 to 2026. The foundry giant will also accelerate its pace on constructing fabs, shortening the typical 3-to-5-year timeline to within 2 years to meet customer demand.

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• [News] TSMC Took Another Step in Advanced Process Expansion

(Photo credit: TSMC)

ACM Research, Inc., a provider of wafer processing solutions for semiconductor and advanced wafer-level packaging applications in China, announced on September 3rd the release of its Ultra C bev-p panel bevel etching tool for fan-out panel-level packaging (FOPLP) applications.

This new tool is designed for bevel etching and cleaning in copper-related processes, offering dual-side bevel etching for both the front and back of panels within a single system, further boosting process efficiency and enhances product reliability.

Moreover, a day after the announcement, the company further revealed that it had received purchase orders for four wafer-level packaging tools, including two from a U.S.-based customer and two from a U.S.-based research and development (R&D) center.

Dr. David Wang, ACM’s president and chief executive officer, believes that FOPLP will grow in importance as it addresses the evolving needs of modern electronic applications, offering benefits in integration density, cost efficiency, and design flexibility.

Reportedly, the new Ultra C bev-p tool is designed to deliver advanced performance, utilizing ACM’s expertise in wet processing. It is one of the first tools to incorporate double-sided bevel etching for horizontal panel applications.

Together with the Ultra ECP ap-p for electrochemical plating and the Ultra C vac-p flux cleaning tools, the Ultra C bev-p is expected to support the FOPLP market by enabling advanced packaging on large panels with high-precision features.

ACM emphasizes that the Ultra C bev-p tool is a critical enabler for FOPLP processes, employing a wet etching technique tailored for bevel etching and copper residue removal.

This process plays a vital role in preventing electrical shorts, reducing contamination risks, and preserving the integrity of subsequent processing steps, ensuring long-term device reliability. The tool’s effectiveness is driven by ACM’s patented technology, designed to tackle the specific challenges of square panel substrates.

Different from traditional round wafers, ACM’s design is said to ensure precise bevel removal process that stays confined to the bevel region, even on warped panels. This is essential for maintaining the integrity of the etching process while ensuring the high performance and reliability needed for advanced semiconductor technologies.

Currently, major players in the FOPLP advanced packaging field include Powertech Technology, ASE Group, SPIL, TSMC, Innolux, JSnepes, and Samsung Electro-Mechanics.

TrendForce points out that FOPLP technology presents advantages and disadvantages. Its main strengths are lower unit cost and larger package size, but as its technology and equipment systems are still developing, the commercialization process is highly uncertain.

It is estimated that the mass production timeline for FOPLP in consumer IC and AI GPU may fall between the second half of 2024 to 2026, and 2027-2028, respectively.

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• [News] ACM Research Steps into FOPLP Advanced Packaging Field
• [News] TSMC Reportedly Forms a Team on FOPLP Development, with Mini Line on the Road 

(Photo credit: ACMR)

According to a report from TechNews, after Innolux shut down its 5.5-generation plant last year, it initially planned to sell the facility to memory giant Micron. However, TSMC successfully acquired Innolux’s 4th Plant in Tainan and its associated facilities, with a transaction value of NTD 17.14 billion.

Despite this, industry sources cited by TechNews have hinted that Micron is still moving forward with plans to establish a facility in Tainan. They are reportedly negotiating with Innolux regarding the Tainan site and have begun subsequent planning.

Reportedly, it is known that Micron had previously approached AUO to inquire about the Tainan color filter fab, but this is still considered to be in the site-selection phase, with Longtan also mentioned as a possible location.

Given the high demand for Micron’s HBM products and persistent rumors about expanding in Taiwan, new facility construction seems necessary to accelerate HBM market penetration.

Additionally, Micron’s Taiwan Chairman, Donghui Lu, has publicly stated that Taiwan is a crucial part of Micron’s global advanced process and packaging strategy. Besides expanding in Taiwan and Japan, Micron is also considering further expansion in the United States.

Regarding inquiries about Micron, Innolux has stated that it does not comment on market rumors.

Industry source cited by TechNews have anticipated that Innolux’s continued reduction in capacity is expected, though the timeline for shutting down facilities remains undecided.

On August 15th, TSMC officially announced the acquisition of Innolux’s 5.5G manufacturing facility in Tainan, Taiwan, for NTD 17.14 billion.

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• [News] TSMC Acquires Innolux’s Plant in Southern Taiwan to Expand Advanced Packaging Capacity
• [News] Innolux Targets to Begin FOPLP Mass Production by Year-End

(Photo credit: Micron)

NEO Semiconductor, a company focused on 3D DRAM and 3D NAND memory, has unveiled its latest 3D X-AI chip technology, which could potentially replace the existing HBM used in AI GPU accelerators.

Reportedly, this 3D DRAM comes with built-in AI processing capabilities, enabling processing and generation without the need for mathematical output. When large amounts of data are transferred between memory and processors, it can reduce data bus issues, thereby enhancing AI performance and reducing power consumption.

The 3D X-AI chip has a underlying neuron circuit layer that can process data stored in 300 memory layers on the same chip. NEO Semiconductor states that with 8,000 neutron circuits performing AI processing in memory, the 3D memory performance can be increased by 100 times, with memory density 8 times higher than current HBM. By reducing the amount of data processed in the GPU, power consumption can be reduced by 99%.

A single 3D X-AI die contains 300 layers of 3D DRAM cells and one layer of neural circuits with 8,000 neurons. It also has a capacity of 128GB, with each chip supporting up to 10 TB/s of AI processing capability. Using 12 3D X-AI dies stacked with HBM packaging can achieve 120 TB/s processing throughput. Thus, NEO estimates that this configuration may eventually result in a 100-fold performance increase.

Source: NEO Semiconductor

Andy Hsu, Founder & CEO of NEO Semiconductor, noted that current AI chips waste significant amounts of performance and power due to architectural and technological inefficiencies. The existing AI chip architecture stores data in HBM and relies on a GPU for all calculations.

He further claimed that the separation of data storage and processing architecture has made the data bus an unavoidable performance bottleneck, leading to limited performance and high power consumption during large data transfers.

The 3D X-AI, as per Hsu, can perform AI processing within each HBM chip, which may drastically reduce the data transferred between HBM and the GPU, thus significantly improving performance and reducing power consumption.

Many companies are researching technologies to increase processing speed and communication throughput. As semiconductor speeds and efficiencies continue to rise, the data bus transferring information between components will become a bottleneck. Therefore, such technologies will enable all components to accelerate together.

Source: NEO Semiconductor

As per a report from tom’s hardware, companies like TSMC, Intel, and Innolux are already exploring optical technologies, looking for faster communications within the motherboard. By shifting some AI processing from the GPU to the HBM, NEO Semiconductor may reduce the workload and potentially achieve better efficiency than current power-hungry AI accelerators.

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(Photo credit: NEO Semiconductor)