AI boom turns chip packaging into the next battleground for semiconductors

The Economic Times · Reuters · 2026-11-06 05:56 UTC

Billions of dollars are being invested in advanced chip packaging due to the demand for AI chips. This growing need is pushing companies to expand their production capacities significantly. Taiwan's TSMC is at the forefront of packaging technology, yet limitations have spurred alternatives.

As demand for artificial intelligence chips outstrips available packaging capacity, companies from Nvidia and AMD to lesser-known players in Taiwan are expanding production, while equipment makers develop new tools, interviews with more than a dozen industry executives and analysts show.

"Packaging was always that thing that you just didn't worry about," former Intel chief executive Pat Gelsinger, now a partner at Playground Global, told reporters in Taipei recently.

Advanced packaging could eventually account for as much as half the value of a chip product, Gelsinger estimated, as some of today's graphics and central processing units can integrate 10 or more chips, sometimes as many as 20.

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