In August, TSMC acquired Innolux’s Tainan plant to use as a CoWoS production base, marking a significant move in the ongoing competition between TSMC and Samsung Electronics in the semiconductor packaging sector. This acquisition is part of TSMC’s broader strategy to maintain its dominance in the market, where it currently holds a solid 62% share with its advanced 2.5D packaging technology, CoWoS.

According to industry sources on September 1, Samsung Electronics’ Device Solutions (DS) division has recently undertaken organizational restructuring and workforce expansion to enhance its packaging competitiveness. This move comes as Samsung faces increasing challenges in the semiconductor foundry sector, particularly in packaging, where TSMC has been strengthening its position for over a decade.

Samsung Electronics has reorganized its Advanced Packaging (AVP) business team into a development team and is actively recruiting experienced professionals in simulation, design, and analysis for R&D. An industry insider familiar with Samsung’s internal situation commented, “They are mobilizing immediately usable solutions to strengthen packaging capabilities and expanding the organization to maximize synergy.”

The demand for advanced packaging has surged as circuit implementation in the front-end process reaches its limits. High-performance packaging technology is essential for AI chips required by global big tech companies like Nvidia, AMD, and Apple. TSMC’s CoWoS technology maximizes connectivity between memory and logic semiconductors, giving it a competitive edge in meeting these demands.

TSMC continues to invest heavily in the packaging sector, planning to expand production capacity and research next-generation technologies like FO-PLP. The industry predicts that TSMC will build two additional new plants and increase its packaging production capacity by up to 70-80% next year.

According to market research firm TechSearch, South Korea’s share in the global OSAT market last year was 4.3%, while Taiwan ranked first with 46.2%. Samsung Electronics is promoting turnkey services and FO-PLP technology but has not yet secured a significant large customer. An industry insider noted, “Packaging is a field where TSMC has been strengthening its competitiveness for over a decade, and it is still increasing investments in advanced technologies, making it difficult for Samsung Electronics to catch up overnight. To secure foundry market share, Samsung needs to accelerate and expand the scale of its packaging investments.”

The current status of the competition between Samsung and TSMC highlights the importance of advanced packaging technologies in the semiconductor industry. As TSMC continues to lead with its CoWoS technology and significant market share, Samsung’s recent efforts in restructuring and workforce expansion indicate its determination to enhance its packaging capabilities. The industry will be closely watching how these developments unfold and impact the global semiconductor market in the coming years.