Sinolink: CoWoS demand creates opportunities for domestic substitution; focus on equipment companies in core incremental segments.

Sinolink released a research report stating that in the post-Moore era, advanced packaging has become the main line of computing power growth, and rising AI capital expenditure is driving continuous explosive demand for CoWoS. Mainland manufacturers are accelerating adoption along differentiated paths, and the supply landscape is expected to move toward diversification. From the perspective of value composition, wafer bonders account for 34.2% and die bonders account for 26.8%, with bonding-related equipment combined accounting for over 60%, making it the largest investment direction. The bank recommends following the main line of domestic substitution in core segments, with core optimism toward equipment manufacturers with scarce positioning. Sinolink's main views are as follows: In the post-Moore era, advanced packaging has become the main line of computing power growth, and rising AI capital expenditure is driving continuous explosive demand for CoWoS Against the backdrop of diminishing marginal returns from process miniaturization, chip performance competition has shifted from process to system integration, with advanced packaging playing the core role in extending the computing power curve. Among these, 2.5D packaging uses CoWoS as the core solution. Compared with traditional FCBGA packaging, CoWoS achieves a leap in routing precision from approximately 10m to sub-micron level by upgrading the interconnect medium. On the demand side, AI capital expenditure is shifting from being solely driven by NVIDIA to a diversified resonance of GPUs, CPUs, and cloud providers' self-developed ASICs. According to data from company websites, the four major cloud providers' capital expenditure totaled approximately US$294.8 billion in 2026H1, up 84.1% year on year; Morgan Stanley expects global CoWoS demand to increase from 1.384 million wafers in 2026 to 2.682 million wafers in 2027, nearly doubling. On the supply side, the landscape dominated by TSMC is difficult to shake in the short term, but as ASE and Amkor accelerate the layout of CoWoS-like capacity, mainland manufacturers such as JCET Group Co., Ltd., TongFu Microelectronics, and SJ Semiconductor Corporation are accelerating adoption along differentiated paths, and the supply landscape is expected to move toward diversification. CoWoS packaging processes reshape the equipment system, with bonding and metrology/inspection segments having the highest value and greatest elasticity CoWoS significantly moves packaging processes forward, adding two major new process clusters: interposer manufacturing and wafer-level assembly, introducing front-end-like processes into packaging lines, and restructuring the equipment system accordingly. According to DataIntelo data, the global 2.5D/3D packaging equipment market is expected to grow from US$8.7 billion in 2025 to US$15 billion in 2030, with a compound growth rate of approximately 11.5%. From the perspective of value composition, wafer bonders account for 34.2% and die bonders account for 26.8%, with bonding-related equipment combined accounting for over 60%, making it the largest investment direction. Metrology and inspection equipment accounts for 22.1%, ranking second. The zero-defect control requirements of multi-chip stacking are driving demand for ultrasonic scanning. Attention should be paid to opportunities in bonding and metrology/inspection equipment brought by advanced packaging. Glass substrates are the core upgrade direction for advanced packaging substrates With a coefficient of thermal expansion matching silicon, ultra-low dielectric loss of 0.005, 10x interconnect density, and 240240mm large-size packaging capability, glass substrates comprehensively surpass organic substrates in warpage control, high-frequency performance, and size scaling, becoming the core upgrade direction for advanced packaging substrates. Their industrialization is highly dependent on TGV formation quality. The laser modification etching route has advantages such as smooth sidewalls and high aspect ratios, with parameter control capability constituting the core competitive barrier. Driven by downstream AI and data center packaging demand, leaders such as Intel, SKC, and Samsung Electro-Mechanics are densely laying out, with volume ramp-up expected gradually after 2027. Core segments breed domestic substitution opportunities, with focus on bonding, ultrasonic scanning, direct-write lithography, and stealth dicing In bonding, when bump pitch shrinks below 10m, hybrid bonding becomes the better choice. Ultrasonic scanning fills the blind spots of X-ray inspection with non-destructive and high sensitivity to air gaps, becoming a rigid quality control requirement in the era of multi-layer stacking. Direct-write lithography replaces physical masks with digital masks, improving precision by two orders of magnitude compared with traditional film exposure, matching the needs of substrate linewidth miniaturization and rapid iteration. Stealth dicing adapts to thin wafer and glass substrate dicing with advantages of no debris, no load, and narrow kerf. Currently, the domestic localization rate of dicing machines is <15%, with broad prospects for domestic substitution. Investment recommendations and valuation Following the main line of domestic substitution in core segments, we are core optimistic about equipment manufacturers with scarce positioning. Relevant targets in the bonding segment are Piotech Inc. and Quick Intelligent Equipment. Piotech Inc. is expanding into hybrid bonding based on its deposition process accumulation, while adapting to both advanced process and advanced packaging needs; Quick Intelligent Equipment has positioned itself in the scarce domestic TCB track through its accumulation in precision welding and assembly processes. Relevant targets in the inspection segment are Skyverse Technology and SBT Ultrasonic Technology. Skyverse Technology is a domestic leader in metrology and inspection, with continuous improvement in its advanced packaging layout; SBT Ultrasonic Technology has self-developed 2.5D/3D advanced packaging ultrasonic scanning microscopes, overcoming core components such as high-frequency pulse generators and ultrasonic transducers, and has already supplied in batches and built a cost-effective domestic solution. The relevant target in the direct-write lithography segment is Circuit Fabology Microelectronics Equipment. As a leader in direct-write lithography equipment, Circuit Fabology Microelectronics Equipment operates in both PCB and advanced packaging tracks, fully benefiting from the trends of substrate linewidth miniaturization and digital exposure substitution. Relevant targets in the laser process segment are Wuhan DR Laser Technology Corp., and Suzhou Delphi Laser. Wuhan DR Laser Technology Corp., with laser technology as its foundation, is further laying out TGV laser modification and glass substrate processing; Suzhou Delphi Laser is deeply engaged in laser fine micro-processing, and its SDBG process provides stealth dicing solutions for thin wafers and glass substrates. Risk warnings Risk of fluctuations in AI computing power demand; risk that mass production adoption progress of new technologies falls short of expectations; risk of intensified industry competition and overcapacity; geopolitical and supply chain security risks; risk of high customer concentration.