Kenanga sees advanced packaging as next battleground in semiconductor value chain - TNGlobal

Kenanga Research believes that advanced packaging will become the next battleground in the semiconductor value chain, offering significant opportunities for Malaysia’s technology players. As Moore’s L... Read original →

Advanced packaging has transcended backend assembly to become a performance-defining layer, triggering cascading demands across EDA, lithography, thermal interface materials, and test equipment—e.g., 2.5D/3D stacking now requires nanometer-scale alignment for hybrid bonding and glass substrates, forcing upstream suppliers to overhaul process flows. Geopolitically, while Malaysia benefits from supply chain diversification driven by the U.S. CHIPS Act and EU Chips Act, gaps in cleanroom standards or workforce certification could jeopardize high-end customer retention. TSMC and ASE are locking in AI clients via CoWoS and FOCoS platforms, leaving Malaysian players like Inari and Pentamaster no choice but to specialize in niches like HBM test automation or co-packaged optics. Over the next 18 months, as NVIDIA’s Blackwell Ultra and AMD’s MI400 ramp, advanced packaging capacity—not wafers—will be the scarcest bottleneck. Malaysia’s MAPC initiative must close the design-manufacturing-test loop to secure a strategic foothold in the chiplet ecosystem.