TSMC is seriously going after Samsung's chip packaging advantage

TSMC remains the undisputed leader in advanced contract chip manufacturing. Samsung has made some strides recently but the gap between the two is quite significant and unlikely to be closed any time soon.

However, there's one area where Samsung enjoys the advantage and the lead, and it appears that TSMC now wants to take that away from its Korean rival.

Samsung Electronics has the lead in “panel-level packaging” or PLP. It has built up its technical capability in this next-generation semiconductor packaging technology by successfully applying it to mobile device processors and power management ICs.

PLP helps improve the productivity of the chip production process while also improving yields significantly. TSMC has been passive on this technology and only seriously started focusing on it back in 2024.

With Samsung's foundry division now gaining a lot more orders and PLP's advantages for AI chip output, TSMC feels the need to close this strategic vulnerability. This may also enable it to snatch this advantage away from Samsung when coupled with its existing dominance in the foundry space.

Reports from South Korea suggest that TSMC is building out the supply chain to establish its PLP mass production system. It's expected to begin PLP mass production as soon as early next year, with a pilot production line likely being built later this year for performance evaluation.