President Joe Biden has taken a dual-focused approach to limit China's advancements in high-tech by restricting Beijing's access to cutting-edge chips and strengthening semiconductor production in the US. The administration is expanding its efforts, with particular emphasis on an emerging battleground for technological supremacy: semiconductor packaging, which is increasingly recognized as a pathway to achieving higher performance.
While the US has historically lagged behind in semiconductor packaging, the landscape is rapidly evolving. The administration has laid out plans for a $3 billion National Advanced Packaging Manufacturing Program, aiming to establish multiple high-volume packaging facilities by the end of the decade. This push aligns with the broader goal of reducing reliance on Asian supply chains that pose security risks to the US.
Advanced packaging has gained prominence as an essential aspect of semiconductor manufacturing, particularly in light of its pivotal role in high-power semiconductors used for artificial intelligence applications. This shift highlights the growing significance of advanced packaging in enhancing chip processing speed and enabling seamless integration of various chip types, ultimately reshaping the semiconductor manufacturing industry.
China has strategically prioritized semiconductor packaging technologies, evidenced by its significant market share in assembly, testing, and packaging. Although China may lag behind in advanced technology, it is well-positioned to catch up in this space, leveraging advanced packaging to bridge the gap and achieve progress in semiconductor capabilities.
The drive for advanced packaging is not limited to the US and China; global players such as Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel are also heavily investing in advanced packaging technologies. This aligns with a broader industry trend of relying on advanced packaging techniques to overcome the slowing pace of progress in traditional chip manufacturing methods.
The emphasis on advanced packaging represents a tectonic shift in the semiconductor industry, as companies increasingly explore modular approaches and chiplets to enhance product capabilities. The implications extend beyond the industry, as the US seeks to ensure a secure supply chain and maintain leadership in semiconductor manufacturing.
The growing significance of advanced packaging reflects an industry-wide recognition of its critical role in achieving higher performance, reshaping semiconductor manufacturing, and ensuring national security. This underscores the need for sustained investment and strategic initiatives to bolster advanced packaging capacities and secure the leadership of key players in the global semiconductor landscape.
These efforts are crucial for ensuring a secure supply chain, promoting technological innovation, and positioning the US as a global leader in high-tech manufacturing, including semiconductor packaging.