Beyond Fab Sovereignty: The Missing Link of Packaging in Semiconductor Security.
Semiconductors are where fabrications factories or “fabs” are investing billions of dollars in all parts of the globe. They want to be producing more chips on their own and less on foreign so they are not so much reliant on foreign suppliers. The actual manufacture of chips, however, is another matter altogether as building a fab is just part of the process. Sometimes, a country makes silicon wafers, but needs other countries to take them and finish them into a complete and reliable silicon wafer product. As these are areas where semiconductor security requirements need to be advanced and tested.
From the semiconductors to be used in a computer, phone or data center, some of the following stages occur. The first step in creating a chip is for engineers to design it. A fab then builds its circuits in electronics on a wafer made of silicon. The wafer is formed into dies, each of which is one piece of the wafer. These dies are packaged up, soldered to other components and tested. The package both shields the chip and provides the electrical connections for the chip. Testing determines if it is effective, meets quality standards. But unless these steps are taken, a manufactured die cannot be a finished product.
Greatly increased packaging and packaging requirements are necessary as newer computers and system based on artificial intelligence must become faster and more at storing information. Many chips have been constructed as a single block of silicon in the past. However, manufacturers are increasingly resorting to miniaturizing the components – known as chaplets – and linking them within the same package. This is also referred to as “advanced packaging.” It combines various parts, adds value to the performance and can improve efficiency of uses of space and energy. The 2.5D packaging structures place the components side by side and then link up using a special package design that’s called an interposer. In 3D packaging, 3-D parts are staked one on top of the other.
This illustrates the important role such connections play in the development of High-Bandwidth Memory (HBM). AI processors are required to have a lot of information in a short amount of time. HBM designs the memory into tightly-packed stacks placed near the processor for high speed memory operations. It’s important to have a good processor, memory and good connections between both. Packaging is therefore more than a cover, and its part of a chip’s performance as well.
Taiwan Semiconductor Manufacturing Company (TSMC) is a great example, as it has developed a Chip-on-Wafer-on-Strata (CoWoS) technology. It integrates different processors and HBM-sacks all in one advanced package. TSMC’s description of CoWoS speaks of the combination of high-bandwidth memory with multiple chips that is intended to allow for high performance computing and artificial intelligence. Its primary variants (CoWoS-S, CoWoS-R and CoWoS-L) utilize different methods of connecting components. Also in the 2025 annual report, TSMC continues to invest in the advanced packaging and chip stacking technologies as the demand for AI and high performance computing continues to rise.
The example highlights important reasons for not only measuring a country’s semiconductor strength by the number of fabs located there. Specialist factories, skilled labor, tester etc., and advanced packaging materials, including advanced barrier layers are needed for advanced packaging. Packaging services and testing are provided to the chipmakers by specialist companies, called Outsourced Semiconductors Assembly/Testing (OSAT) companies. This will be a country that has wafer factories but does not have these capabilities, for which overseas partners will be required to finish up the chips. Packaging facilities, infrastructure for testing and substrate technology make up a portion of the semiconductor supply chain and are important, according to industry group SEMI.
The other dependency created by memory is important: The other dependency created by memory is vital: For advanced computing, South Korea’s own SK Hynix is important contributor of materials such as HBM. This means that a completed AI chip can be based on a processor company, a packaging company and a memory company. The lack or delay in any step can impact on the final product. Testing is as crucial as it is, too–complex packages must be tested for performance, heat management, and reliability BEFORE they’re delivered.
Governments are now taking steps towards filling in this gap. Also due to its high-tech companies including Taiwan Semiconductor Manufacturing Co (TSMC), Taiwan’s packaging expertise has been developed. It’s not just funding research that’s domestic—American government funding is also being put toward advanced packaging products in the country via the National Advanced Packaging Manufacturing Program, which is the funding of substrates, materials, manufacturing and workforce training. Part of this effort is recognition that the skimping on investment in wafer manufacturing will not constitute a full-fledged semiconductor industry.
The lesson learnt is that semiconductor sovereignty could not only be a question of owning a factory that produces semiconductors. It demands access to the required ability, materials and facilities to even design, produce, package and test chips. Government to encourage local packaging industry, up skill engineers and technicians, conduct proper testing and research and establish reliable relations with suppliers in other nations. Going 100% self-sufficient is not necessarily the best choice as it may be too expensive, but using a few major suppliers may have risks.
Finally, advanced packaging and testing APIs marry a silicon wafer with the end product being a semiconductor. The more complex technology of AI systems that rely on an increasing use of chaplets and HBM will make these stages even more significant. Countries that are looking to build a secure semiconductor industry have to turn their attention to instead making a robust semiconductor value chain. What is important is not just the ability to make chips, but also their ability to connect, test, and provide them for the nation in the process of attaining true semiconductor sovereignty.
The views expressed in this article are solely those of the author and do not necessarily reflect the views of The Opinion Desk.
