As competition in semiconductor packaging technology intensifies, Taiwan's TSMC, the world's largest contract chipmaker, has completed and begun operating a production line for a next-generation packaging technology. The technology and yields are expected to take about a year to stabilize.
Taiwan's Economic Daily News reported on the 10th, local time, that the first production line for TSMC's next-generation packaging technology, Chip on Panel on Substrate (CoPoS), had been completed and started operating at the company's Advanced Packaging Fab 7 in Chiayi, Taiwan. The line has entered full-scale testing of key equipment and materials and commercialization verification at a 310mm-by-310mm panel format, and the technology and yields are expected to take about a year to stabilize.
The biggest difference between TSMC's existing packaging, Chip on Wafer on Substrate (CoWoS), and the next-generation CoPoS is the material of the interposer, the intermediate layer that connects the chip and the substrate. CoWoS uses a round wafer as the interposer, while CoPoS uses square glass. Glass does not deform even under high heat, and its square shape loses less area than a round wafer and is easier to scale up, making it suitable for producing very large AI chips. Because it uses inexpensive glass instead of costly silicon, cost savings are expected. However, glass is fragile and difficult to process, making production more challenging.
The industry had initially expected CoPoS to enter mass production in 2028 to 2029. But Morgan Stanley recently projected that CoPoS mass production could begin in 2028, earlier than expected. The reasons are that the CoWoS supply shortage is severe and that new packaging technology is needed as AI chips continue to grow in size. TSMC is also accelerating its adoption of CoPoS because Intel's advanced packaging technology, Embedded Multi-die Interconnect Bridge-T (EMIB-T) — a full 50% cheaper than CoWoS — is preparing for mass production next year.
Among Korean companies, Samsung Electronics (005930.KS) is pursuing development with a target of adopting a glass interposer in 2028. Samsung Electro-Mechanics and SK Absolics, among others, are developing ways to switch the substrate to glass. Glass substrates deform less and are flatter than existing plastic substrates, allowing ultra-fine circuits to be drawn in without an interposer. Samsung Electro-Mechanics has been running a glass substrate pilot line at its Sejong plant since 2025, and in July it established Glasem, a joint venture with Japan's Sumitomo Chemical Group to make key materials for glass substrates. SK Absolics is targeting mass production of glass substrates in 2027, and LG Innotek in 2028.
Display Panel Plants Transformed Into Semiconductor Packaging Plants
As demand for advanced packaging surges with the growth of the AI industry, TSMC, ASE and others are aggressively expanding large-scale production facilities. But securing large plant sites and a stable power supply within Taiwan is not easy. As a result, acquiring legacy display panel plants and converting them into semiconductor packaging plants is drawing attention. Taiwan's legacy display plants have lost their competitiveness to low-cost Chinese displays, but they have the advantage of being fully equipped with very large clean rooms and ample power facilities. They also have operating know-how such as transporting large substrates, making them well suited to serve as next-generation semiconductor packaging plants.
The industry expects that TSMC will expand its advanced packaging capacity by acquiring two plants owned by display panel maker AUO adjacent to TSMC's Fab 15 complex in the Central Taiwan Science Park: the L7 plant (Generation 7.5) and the L5C plant (Generation 5). According to an industry source, TSMC is understood to have conducted due diligence to acquire the AUO plants, with the expected deal value seen exceeding NT$30 billion (about 1.3 trillion won) — the highest price among Taiwan display plant sales in recent years. However, TSMC and AUO said they would not comment on speculative rumors.
In 2024, TSMC likewise acquired a plant from Innolux, a panel maker under the Foxconn Group, at a price 20% higher than the market's expected value and transformed it into a packaging plant.
