The artificial intelligence chip war has spread to the packaging field.

1. Shrinking chip sizes is getting more difficult and expensive. Advanced chip packaging, which combines different chips and components together, is emerging as a way to improve performance while controlling costs.
2. Packaging is crucial for next-gen AI chips. Leaders like TSMC are investing heavily to expand advanced packaging capacity to meet demand. Equipment makers like Japan’s Disco also stand to benefit.
3. Packaging could be an area where China makes progress. China already dominates chip assembly and testing. Companies like JCET are major players in packaging. As packaging rises in importance, it provides an opening for China even with US sanctions on other chip technologies.
4. Packaging technologies could eventually get caught in US-China tensions. They aren’t restricted yet, but worsening relations raise the risk of future sanctions. That would be complicated by China’s existing large market share.
5. The AI chip wars are expanding the tech battleground. With AI driving demand, the US-China struggle for chip supremacy is now being fought in every part of the semiconductor supply chain.

The artificial intelligence chip war

As the difficulty and cost of chip manufacturing continues to increase, advanced chip packaging technology (combining different chips and components) is rapidly rising because it can improve performance while controlling costs. This provides important support for the next generation of artificial intelligence chips.

Leading companies such as TSMC are investing heavily to expand advanced packaging production capacity to meet market demand, and equipment suppliers such as Japan’s Disco (Disco) are also benefiting from this. At the same time, packaging technology has also provided China with an opportunity to make progress under US chip sanctions. China already dominates the field of chip assembly and testing, and companies such as Jiangsu Changdian are important players in the field of package testing.

However, as the relationship between China and the US continues to deteriorate, packaging technology is also at risk of being sanctioned. Given that China already has a large market share in this area, any US sanctions would be complicated.

It can be said that the demand for artificial intelligence chips is spreading the battle between China and the US for chip hegemony to all parts of the supply chain. There are almost no companies involved in this contest that can stand alone.