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Samsung plans to use TSMC’s 3nm process to fabricate base bare dies for NVIDIA’s NVHBM, with core dies built on 6th-generation DRAM. This marks Samsung’s first adoption of external foundry services for HBM. NVIDIA is driving interface standardization via customized memory controllers.
JW Insights in-depth analysis: Glass substrates are a prerequisite for scaling up AI packaging. However, bottlenecks persist in microcracks, via metallization and lengthy qualification cycles. Under the base-case scenario, the narrow-definition market will only reach approximately USD 1.5 billion by 2032, with capital market enthusiasm running 2–3 years ahead of industrial maturity.
ABF remains the most constrained segment: Ajinomoto’s 50% capacity expansion will not come online until 2030. Goldman Sachs estimates the supply gap will widen to 42% in 2028, while mainland China’s self-sufficiency rate stays below 5%. Huazheng’s CBF, Lotus’s NBF and Hongchang’s GBF are still undergoing customer qualification.
CPO mass production is drawing near. SEMI forecasts test equipment sales to rise 31% to USD 15.3 billion in 2026 and hit USD 20.8 billion by 2028. The 2027–2028 period will serve as the window for architecture convergence and mass-production validation.
Increasing divergence in the SiC sector: Infineon and Wolfspeed signed a multi-year 200mm supply agreement. LX Semicon divested over 60 patents in a bundled deal, effectively exiting the business. TSMC’s second JASM fab has been approved for conversion to 3nm production.
In-depth Analysis
Optical Communications / Optical Chips: CPO is moving from sample validation to mass-production lines. SEMI projects global test equipment sales to rise 31% to USD 15.3 billion in 2026 and reach USD 20.8 billion by 2028. Teradyne acquired Quantifi Photonics to strengthen optical measurement capabilities, while Advantest partnered with VIAVI and SENKO to demonstrate module-level simulated mass-production test workflows for CPO. TrendForce identifies 2027 as the year for convergence of CPO test architectures and equipment investment, with large-scale mass-production validation kicking off in 2028. Chinese firm Link Instruments has commenced mass delivery of its 65 GHz sampling oscilloscope; Robotechn acquired ficonTEC to enter optoelectronic packaging and test equipment, though high-end measuring instruments still rely on imports. Adoption of glass substrates for 1.6T/3.2T optical modules and CPO optical engines is expected in 2027, with Wufang Optoelectronics already delivering small-batch shipments.
Advanced Packaging & Testing: JW Insights’ in-depth calculation shows that the side length of AI accelerator packages will expand from roughly 90 mm in 2026 to above 130 mm after 2030. The Blackwell package covers approximately 2,739 mm², and Rubin Ultra around 7,470 mm². Organic substrates suffer from uncontrollable warpage near the 120 mm dimension, making glass cores essential for package scaling. Nevertheless, mass production is still hindered by SeWaRe microcracks, copper voids in via filling with an aspect ratio above 15:1, packaging-level qualification and inconsistent panel specifications. As of October, no player globally has announced formal mass-production orders for glass cores. Under the base-case scenario, the narrow market for glass cores plus interposers will hit only USD 1 billion / 5 billion / 15 billion in 2028 / 2030 / 2032. The competitive landscape follows the trajectory: “South Korea in near term, TSMC CoPoS in medium term, Japanese upstream suppliers in long run”. Upstream ABF substrates remain tighter: Ajinomoto runs at full capacity with monthly output of around 2 million square meters. Its 50% capacity expansion will not be ready until 2030, and the third plant is scheduled to come online in 2032. Ajinomoto implemented a roughly 30% price hike in May. Mainland China’s self-sufficiency rate stands below 5%. Huazheng New Materials’ CBF, Lotus Holdings’ NBF and Hongchang Electronics’ GBF are all in qualification cycles, which typically take 1–3 years. On the testing side, Weice Technology’s RMB 2 billion convertible bond proposal has passed review, to expand capacity for AI computing, memory and high-end CIS testing.
SiC / Power Semiconductors: Infineon and Wolfspeed signed a multi-year supply agreement for 200 mm SiC wafers, shifting the supply ecosystem from 150 mm to 200 mm. Power supply chains for AI data centers serve as a new growth driver. On the other hand, LX Semicon bundled and transferred over 60 SiC patents, effectively exiting the sector. The industry is accelerating differentiation amid expanding demand and shakeout of second-tier players.
Memory & Compute Chips: Samsung plans to deploy TSMC’s 3nm process to manufacture base bare dies for NVIDIA NVHBM, with core dies built on the 6th-generation DRAM. This marks Samsung’s first collaboration with TSMC in HBM manufacturing. NVIDIA will integrate custom memory controllers into base bare dies to standardize products from different suppliers. Dell warns that HBM/DRAM shortages will worsen further in 2027 and may last for four years, with backlog orders for AI servers reaching USD 95 billion. South Korea’s finance minister expects the strong chip boom to persist at least through 2027.
Equipment & Materials: A JW Insights report estimates the global semiconductor materials market at USD 73.2 billion in 2025, with wafer fabrication materials expected to reach USD 48.9 billion in 2026. The domestic substitution rate for wet electronic chemicals stands at approximately 35%; photoresists remain around 95% import-dependent, and EUV photoresists are still domestically unavailable. Jingrui Electronic Materials recorded nearly 300% YoY growth in ArF photoresist sales. Zhongju Core saw its revenue from electronic specialty gases rise by 136.78%. Aisen’s TGV copper plating additives have secured mass-production orders from leading clients.
Wafer Foundry: Japan’s Ministry of Economy, Trade and Industry (METI) approved JASM’s second fab to shift production from 40/12/6nm to 3nm, with a designed monthly capacity of 63,000 wafers and a planned 6,000 wafers per month for 3nm. Mass production is targeted for end-2028, granting Japan domestic 3nm mass-production capability for the first time. TSMC’s Kumamoto 3nm fab has secured subsidies concurrently. Intel’s Rene Chen stated that 80% of the company’s restructuring is complete, and the manufacturing gap between the US and China “is not substantial”.
Policy / Macro Environment: The consultation period for the revised China Catalogue of Technologies Prohibited and Restricted from Export runs until November 15. Pre-export registration is required for AI computing cluster and large model technology exports. Key events to watch this week: GTC Berlin (Oct 20–22, Jensen Huang’s speech on Oct 21), RISC-V China Summit (Shenzhen), plus earnings releases from SK Hynix on Oct 28 and Samsung on Oct 29.
Daily Investment Tips
1.Glass substrates: the long-cycle growth theme is being priced as a short-cycle sprint. Glass substrate-related listed firms derive only a tiny share of revenue from this business. Mass production timelines have been gradually pushed back from 2027, and the risk of overcapacity in pilot lines is high before 2027. The relatively certain rollout sequence runs as: glass substrates for optical modules / CPO, communication chips / CPUs, HBM interposers, and AI GPUs. Preference should be given to companies with verified shipments and yield track records.
2.ABF / substrate shortage persists, yet qualification cycles for domestic films span 1–3 years, limiting near-term earnings elasticity. For the memory chain, it is critical to distinguish between the “price peak” and the “earnings peak”. Dell’s USD 95 billion backlog underpins demand, but module vendors saw Q3 sequential weakness. Investors should closely monitor guidance on 2027 contract prices from Korean memory players in their earnings releases.
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