TSMC dominates the Fan-Out market: ASE and others are catching up

TSMC’s Fan-Out success with Apple and high-performance computing are pushing Intel, Samsung, ASE, and all other competitors to find new innovative solutions.

“As part of advanced packaging, FO solutions have become critical and effective for foundries and IDMs, increasing device performance and bandwidth and reducing the gap between Silicon and substrate.” asserts Stefan Chitoraga, Technology and Market Analyst specializing in Packaging and Assembly at Yole Intelligence, part of Yole Group. He adds: “OSATs are also following this trend, offering innovative FO Packaging solutions that help solve front-end challenges with the slowing of Moore’s Law, resulting in bigger dies to improve performance.”

In this dynamic context, Yole SystemPlus, part of Yole Group of Companies, investigate disruptive semiconductor technologies and related markets in depth. They point out the latest innovations in the packaging industry and underline the business opportunities.
Released today, the Fan-Out WLP and PLP Applications and Technologies 2021 report helps industry players to understand the evolution of the FO Packaging market and technology, its roadmap, its significance, and its solutions for the next high-performance applications. It describes what capabilities each FO platform is offering. Including market trends and forecasts, supply chain, technology trends, technical insights and analysis, take away and outlook, this study also delivers an in-depth understanding of the ecosystem and main players’ strategies.
In addition, the HiSilicon Hi1382 Coherent Processor with ASE’s FOCoS report from the reverse costing engineering company Yole SystemPlus, includes a full investigation of the component, featuring a detailed study of the FO-SiP solutions, including die analyses, processes, and package cross sections focused on the interfaces. It contains a complete cost analysis and a selling price estimation of the component.

What are the economic and technological challenges of the computing for datacenter industry? What are the key drivers? Who are the suppliers to watch, and what innovative technologies are they working on? What are the different existing technologies?

Yole SystemPlus presents today their vision of the FO WLP and PLP applications and technologies industry.

As analyzed by Yole’s team in the new Fan-Out WLP and PLP Applications and Technologies 2021 report, the FO Packaging market is experiencing strong growth of 15.1% CAGR2020- 2026, from US$1,475 million in 2020 to US$3,425 million by 2026. This is led by HD FO and UHD FO – fueled by the adoption of high-performance applications.
More specifically, in 2020, FO revenue was heavily dominated by APE applications for smartphones and smartwatches.
In 2021, more revenue is expected from the UHD domain due to HPC applications. Cloud infrastructure, 5G, autonomous driving, and the artificial intelligence revolution will shape the packaging trend of the next decade, with a denser multilayer RDL-build-up approach being one of the solutions helping to meet More-than-Moore requirements at system-level. UHD Fan-Out will play a key role and is, therefore, going to experience the fastest growth compared to the other Fan-Out categories.

In FO packaging technology, a battle is raging between OSAT companies and foundries. OSAT companies are mainly supplying small components with FO technology. In high-end applications, the penetration of the technology started with TSMC in consumer applications in partnership with Apple.
Without a doubt, TSMC is the FO market leader by revenue. This is attributed to the penetration of the in FO package into the APE for Apple’s iPhone, which generated a new market segment, HD FO, in 2016. Till now, Apple still uses TSMC’s in FO for its latest iPhones. The foundry is also positioning its FO technology in High Computing segment with Nephos, among others, that chose TSMC’s inFO_oS technology for its high-speed switching device.
Stéphane Elisabeth, PhD, Senior Technology and Cost Analyst at Yole SystemPlus in the HiSilicon Hi1382 Coherent Processor with ASE’s FOCoS report comments: “In parallel, several players like ASE are working on industrial applications where the use of FO is expected to increase. In High Performance Computing the technology is trying to compete with interposer-based assembly. Today, OEM prefer the use of CoWoS technologies for GPU and DRAM assembly. But for applications like interfacing and switching, FO technology brought shorter interconnection providing high speed communication”.
Huawei, via HiSilicon, chose ASE’s FOCoS for its coherent processor, the Hi1382. The Hi1382 is a processor included in the BBU BBU5900 for Huawei in two different layers. One is in the universal baseband processor unit and one is in the Universal Main Processing and Transmission Unit. On both cards, the coherent processor manages the interface between the optical fiber module and the network processors. To ensure high speed interconnecting between the entities, ASE’s fan-out packaging technology has been selected and implemented. The technology allows heterogenous structure in the integrated circuit design by interfacing a SoC die based on 16-nm technology node with a transceiver die based on 28-nm technology node.

Today, heterogeneous integration is the defining trend of the next decade, with FO positioned as one of the key packaging solutions to solve front-end problems (slowing Moore’s Law). TSMC is aware of that and is diversifying its portfolio in advanced packaging, giving great importance to UHD FO solutions.
For Favier Shoo, Team Lead Analyst in the Packaging team within Semiconductor, Memory and Computing Division at Yole: “This strategy positions TSMC as a company encompassing two business models. First, it is a foundry producing front-end dies with advanced technology nodes. Second, it creates advanced packaging solutions to improve its dies’ performance and bandwidth, acting as an OSAT. This strategy, combined with huge CapEx for continuous development of new solutions, makes TSMC the biggest player in this field”.
InFO_SoW is one of its latest solutions that could be used by Cerebras for its WSE starting in 2021. Moreover, TSMC is expected to invest heavily to support devices for 5G deployment and HPC applications. After TSMC, ASE has the second-largest share of the market in UHD FO. It announced significant CapEx for its wafer-level packaging business, remaining a top OSAT after the acquisition of SPIL and USI. It has produced FOCoS for Huawei networking chips since 2016, which is a significant achievement. Other important players, such as Samsung, PTI, and JCET, will possibly penetrate the UHD FO market in the coming years and gain more market share.
In summary, dominant foundry business coupled with strong InFO product line-up and increased investment in its package infrastructure and innovative solutions, TSMC is in a robust position to keep and even expand its leadership.