US Targets Taiwan and TSMC: $3 Billion Investment for Developing High-Performance AI and 3D Chip Packages

The U.S. takes another strategic move, well aware of the current situation in the semiconductor world. They take it very seriously and listen to their companies, the leading one being NVIDIA, followed by Intel. The fact is that packaging is an essential component in present and future chips, as it contributes significantly to the success of new architectures, mainly MCM and 3D. That’s why they are launching the National Advanced Packaging Manufacturing Program (NAPMP), in which they will invest a staggering $3 billion.

TSMC is facing serious challenges related to chip packaging. Even though recent reports claimed that they had increased their production capacity by 20%, NVIDIA, AMD, and other Artificial Intelligence (AI) focused companies require much more production capacity. The demand is there, and the U.S. wants to seize the opportunity considering future developments.

The U.S. will invest $3 billion in next-generation chip packaging

As mentioned earlier, the new NAPMP, within the CHIPS Act, will see the Biden administration allocate an additional $3 billion for this purpose. According to the program’s official website, the objectives of this program are as follows:

The NAPMP will invest $3 billion in programs that include an advanced packaging pilot facility to validate and transition new technologies to U.S. manufacturers, workforce training programs to ensure new processes and tools have skilled personnel, and funding for projects.

The Department anticipates announcing the first NAPMP funding opportunity (related to materials and substrates) in 2024.

This new program is supplementary to the CHIPS for America Act, as the U.S. government clearly states that “semiconductor investments will not be successful without investments in advanced packaging. The CHIPS and Science Act offers a once-in-a-generation opportunity to establish a competitive national advanced packaging capability in semiconductor manufacturing.”

NAPMP: three development focus points and six priority areas for the U.S.

The impact on TSMC and Taiwan is already established and will likely involve Intel, GlobalFoundries, Applied Materials, and other smaller companies. This is inferred from the emphasis of the program:

1. The need to establish advanced packaging facilities (such as Foveros 3D and similar) that can accelerate the transfer of innovations in three areas: packaging itself, required equipment, and manufacturing process development.

2. The aim to drive the development of digital tools (EDA, potentially with AI) to reduce time and costs.

3. Following Taiwan and China’s example, the goal is to establish and support partnerships between industry, universities, training and education providers, along with the government, to create a stronger workforce, which is essential given the current lack of qualified personnel.

The six specific priority areas are as follows:

– Materials and substrates
– Equipment, tools, and processes
– Power delivery and thermal management for advanced packaging assemblies
– Photonics and connectors that communicate with the outside world
– A chip ecosystem
– Multichiplet system codesign with automated tools

Therefore, this is a powerful move against China and Taiwan, even though the initial funding for the CHIPS Act may not be very high. It lays the foundation for reducing dependence on these two countries, their companies, and their products, competing at the highest level.