Open Source Securities: High-end advanced packaging enters a period of rapid development, emphasizing investment opportunities under the trend of independent controllability.

Open source securities research report released that by 2025, the high-end advanced packaging production line will enter a period of rapid development, and domestic packaging and testing manufacturers are expected to benefit. Domestic packaging and testing manufacturers are facing a key breakthrough window for high-end advanced packaging. The investment opportunities brought by the improvement of the capacity, yield, and capacity utilization rate of local manufacturers' high-end packaging and testing production lines are valued. The main points of the open source securities are as follows: Review of the development history of CoWoS: From exploration and verification to commercialization and platformization of technology Advanced packaging is an important path to enhance chip performance under the idea of "beyond Moore." The packaging process has been upgraded from "packaging" to "construction," developing advanced packaging such as FC, FO, WLCSP, SiP, and 2.5D/3D with obvious advantages (high performance, low cost, small footprint, short cycle, etc.), and the application margin continues to expand. The application of AI opens up the growth space for CoWoS packaging: CoWoS is a 2.5D packaging technology developed by TSMC, achieving volume production in the AI era. The demand for AI chips for more computational power and more memory drives the development of CoWoS-S (silicon interposer) towards larger sizes, and in this process, the complex process brings yield challenges, and the increase in interposer size leads to a decrease in yield. To balance cost and performance, CoWoS-R and CoWoS-L were introduced. Compared to CoWoS-L, which uses "local silicon interconnect + RDL" as the interposer, effectively avoiding the problems caused by large-size silicon interposers, while retaining the excellent characteristics of silicon interposers, may become a focus of future development. By 2024, TSMC has achieved mass production of CoWoS-L, and Nvidia's Blackwell series GPU adopts this process. Demand side: HPC/automotive electronics/high-end consumer electronics driving the expansion of the advanced packaging market Under the strong demand from end terminals such as high-performance computing, AI/machine learning, data centers, ADAS, and high-end consumer electronic devices, Yole predicts that the global advanced packaging market size will increase from 37.8 billion yuan in 2023 to 69.5 billion US dollars in 2029. Telecommunications and infrastructure (including AI/HPC) are the main drivers. In Q2 2025, the capital expenditure of North American cloud factories hit a new historical high again, and the AI flywheel effect may have formed. With the trend of "computing power is national power," the domestic computing power industry is making leaps in development. With the vigorous development of domestic AI computing chips, the high-end advanced packaging has opportunities for development under the trend of independent controllable trends. Supply side: Numerous players in advanced packaging, domestic manufacturers accelerate breakthroughs According to Yole's forecast, the growth in wafer numbers for advanced packaging mainly comes from 2.5D/3D packaging, with a CAGR of up to 30.5% from 2023 to 2029, which is expected to support AI/ML, HPC, data centers, CIS, and 3DNAND. Global leading manufacturers: Competing in the high-end market space with major technology platforms and advanced processes. The demand for CoWoS packaging is outstripping supply, and TSMC is significantly expanding its production capacity, expected to reach 90-110,000 wafers per month by 2026. Mainland manufacturers: With the capability to industrialize advanced packaging. Packaging and testing are strong sectors in the semiconductor industry in mainland China, with leading manufacturers already holding a certain share in the mid-to-high-end advanced packaging market, poised to lead from chasing. Changes in the landscape: CoWoS division of labor cooperation, OSAT factory welcomes opportunities for entry. The coooperation between the front-end wafer factory and the back-end OSAT has become an important model for completing CoWoS, lowering the threshold for OSAT to enter the high-end advanced packaging market. Risk warning: AI industry development falls short of expectations, equipment/materials support falls short of expectations, high-end production line capacity release falls short of expectations, and uncertainty in changes in the international situation pose risks.