The Zhitong Finance App learned that Huafu Securities released a research report saying that according to SEMI data, on the one hand, global chip production capacity will increase by 6.4% by 2024, and China will lead the increase in world semiconductor production; on the other hand, equipment expenses for global front-end 300mm fabs will resume growth in 2024. Chiplet adapts to the development needs of the AI era, drastically reduces chip design and manufacturing costs through “deconstructure-restructure-reuse”, and realizes heterogeneous restructuring. Currently, Chiplet is mainly implemented through various packaging technologies such as MCM, InFO, CowOS, and EMIB. These advanced packaging technologies span multiple levels from 2D to 3D. Looking ahead, with the gradual improvement of the Chiplet Interconnect Standards (UCle) Alliance, the Chiplet layout will continue to deepen, and the prospects are promising.

The main views of Huafu Securities are as follows:

The semiconductor boom is gradually picking up, and the sealing and testing process is expected to fully benefit

On the demand side, according to the latest report released by the American Semiconductor Industry Association (SIA), global semiconductor industry sales totaled 46.2 billion US dollars in February 2024, up 16.3% year on year, the biggest increase since May 2022. Meanwhile, in November 2023, sales in the global semiconductor industry achieved the first year-on-year correction since August 2022. From November 2023 to February 2024, global semiconductor sales continued to maintain positive year-on-year growth, showing an overall steady upward trend.

On the supply side, according to SEMI data, on the one hand, global chip production capacity will increase by 6.4% by 2024, and China will lead the increase in world semiconductor production; on the other hand, equipment expenditure for global front-end 300mm fabs will resume growth in 2024. It can be seen from this that the semiconductor industry is sending positive signals of economic recovery in many ways. Among them, the semiconductor sealing and testing process is a back-end process for integrated circuit production, and its revenue situation is highly consistent with semiconductor sales. With the semiconductor boom and the gradual recovery of downstream demand, the sealing and testing process is expected to take the lead in benefiting and starting new growth.

With the advent of the post-Moorish era, advanced packaging shines brightly

Huafu Securities believes that as demand for high computing power such as AI and HPC changes rapidly, demand for high-performance chips as carriers of computing power is also soaring. However, the path to advanced manufacturing is already difficult. On the one hand, the slowdown in Moore's Law iteration progress has dramatically increased the marginal cost of chip performance growth; on the other hand, due to the bottleneck of lithography machines, the downsizing of the previous process is also becoming more difficult. In this context, advanced packaging has become a key way to transcend Moore's Law and improve chip system performance because it can improve the integration density and interconnection speed of chips, lower the threshold for chip design, and enhance the flexibility of function matching.

Compared with traditional packaging, advanced packaging mainly uses processes and technologies such as Bump, RDL, Wafer, and TSV to achieve the effects of electrical expansion and improve unit volume performance, helping to further improve chip integration and efficiency. Currently, mainstream advanced packaging solutions include inverted packaging, wafer-level packaging, 2.5D/3D packaging, and system-level packaging, etc., which are generally developing in the direction of intensive connectivity, diversification of stacking, and systematization of functions. According to Yole's forecast, the advanced packaging market will grow at an annualized compound growth rate of 10.6% to US$78.6 billion in 2028, and advanced packaging is expected to account for 57.8% of the packaging industry in 2028. Advanced packaging will become the main growth pole of the global packaging market.

Taking advantage of the AI era, Chiplet brings new industrial opportunities

Chiplet is not only an important application of advanced packaging technology, but also one of the best ways to improve the computing power of AI chips in later processes. Chiplet adapts to the development needs of the AI era, drastically reduces chip design and manufacturing costs through “deconstructure-restructure-reuse”, and realizes heterogeneous restructuring. Currently, Chiplet is mainly implemented through various packaging technologies such as MCM, InFO, CoOS, and EMIB. These advanced packaging technologies span multiple levels from 2D to 3D.

Currently, Chiplet is dominated by leading global semiconductor manufacturers such as TSMC, Intel, and Samsung, while major overseas manufacturers such as AMD, Intel, and Apple have also widely used Chiplet technology in their high-performance computing chips. At the same time, domestic manufacturers are also speeding up the launch of Chiplet-related products to help upgrade the domestic chip industry. Looking ahead, with the gradual improvement of the Chiplet Interconnect Standards (UCle) Alliance, the Chiplet layout will continue to deepen, and the prospects are promising.

Investment advice: It is recommended to focus on enterprises focusing on the layout of advanced packaging, core packaging equipment and materials

Packaging and testing plants: Changdian Technology (600584.SH), Tongfu Microelectronics (002156.SZ), Huatian Technology (002185.SZ), Jingfang Technology (603005.SH), Qipai Technology (688216.SH), Qizhong Technology (), Huicheng (USD), Yongsi Electronics (), Hualing Co., Ltd., Wetest Technology (688372.SZ). 688352.SH 688403.SH 688362.SH

Sealing and testing materials: Shennan Circuit (002916.SZ), Xingsen Technology (002436.SZ), Huahai Chengke (688535.SH), Lianrui New Materials (688300.SH), Kangqiang Electronics (002119.SZ), Aisen Co., Ltd. (688720.SH), Shanghai Xinyang (300236.SZ).

Sealing and testing equipment: Changchuan Technology (300604.SZ), Jingzhida (688627.SH), Chipboard (688630.SH), Quick Co., Ltd. (603203.SH), Guangli Technology (300480.SZ), Huafeng Measurement and Control (), etc. 688200.SH

Risk warning: Risk that downstream demand falls short of expectations, risk that related companies' business development falls short of expectations, risk that advanced packaging research and development progress falls short of expectations, geopolitical risk, and risk of worsening market competition patterns.