Advanced packaging ushers in a crucial turning point: Goldman Sachs Group, Inc. is optimistic about the glass substrate leader, Guo Mingchi strongly supports Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US)

Note that Goldman Sachs Group, Inc. is skeptical about the progress of glass core substrate (GCS) by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), while also upgrading the rating of glass fiber fabric manufacturer Nittobo from Japan to "buy." However, renowned analyst Ming-Chi Kuo posted on the X platform on Thursday, stating, "My understanding is that the other reasons cited by Goldman Sachs Group, Inc. for the rating upgrade do not conflict substantively with the constructive view on the future development of GCS in the coming years." Nittobo from Japan holds more than half of the glass fiber fabric market share, while Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is developing an alternative technology called GCS. Kuo mentioned in June that at the 2026 JPCA exhibition in Japan, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR presented a speech titled "AI Evolution: Essential Advanced Packaging Technology." One slide titled "Glass Substrate Development for CoWoS" was leaked and drew attention. Kuo pointed out that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has officially announced a collaboration with Ibiden and Innolux to develop GCS. "The structure is a three-layer design: a glass core sandwiched between two layers of ABF lamination. This is the 'oS' part in CoPoS. Secondly, the market has underestimated the importance of glass core substrates - a capability that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR must have. In other words, in CoPoS, 'oS' is more critical than 'CoP'. This also explains why during the testing phase, it is paired with existing CoW, rather than combined with CoP." The analyst mentioned at that time that the unit cost of glass core substrates is several times that of current ABF substrates. Innolux processes glass at a very high unit price and it is the most crucial material. Kuo also added that, apart from NVIDIA Corporation, two other American customers have shown strong interest. Goldman Sachs Group, Inc. analysts, when upgrading Nittobo's rating on July 6th, stated, "As for the alternative ABF core substrates - a key issue considering the potential replacement of glass fabric - industry views from ABF substrate manufacturers such as Ibiden suggest that it is unlikely to be adopted before 2030. The industry also generally expects that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's commercial production of glass substrates will only begin after 2030. We believe that existing glass fabric is likely to continue to be used until at least the Rubin Ultra generation. Meanwhile, with the increased size of packaging substrates and the added core thickness (resulting in more T glass content and additional layers for reducing warping), Nittobo should continue to benefit from this." Kuo mentioned in the X platform post that based on past trends, the likelihood of significant updates on GCS/CoPoS by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in the upcoming July earnings conference call is low. The analyst believes, especially considering that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has shared key research and development achievements at a conference in Japan, and rare mentioned supplier partners. Kuo also noted that the likelihood of Ibiden and Innolux disclosing significant progress on GCS during the August earnings conference call is also low.