Highlights

AI advancements demand faster processing and lower power consumption, prompting TSMC to invest in advanced packaging and silicon photonics technologies, escalating the demand for associated testing and analysis. The rise of CoPoS, FOPLP, and silicon photonics technologies strengthens the operations of testing companies such as HKC, Advantest, and iST. These developments significantly bolster operations across the industry.

Sentiment Analysis

• The article reflects a positive outlook on the testing and analysis industry growth driven by new technologies.
• Increased demand for these technologies suggests optimism about future innovations.
• The emphasis on advanced packaging and photonics shows potential financial benefits for industry players.
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Article Text

As artificial intelligence technologies call for faster processing speeds with reduced power consumption, TSMC (2330-TW) has been actively investing in advanced packaging and silicon photonics. This strategic move has spurred increased demand in the testing and analysis sectors, with industry experts optimistic that developments like CoPoS, FOPLP (fan-out panel-level packaging), and silicon photonics will continue to drive this demand, subsequently strengthening the operations of testing companies such as HKC (3587-TW), Advantest (6830-TW), and iST (3289-TW).

CoPoS is a technology that streamlines the transition from wafer to panel forms, akin to the panelization of CoWoS and utilizing a square substrate to incorporate more chips, thereby enhancing production efficiency and cost-effectiveness. However, high-temperature warping issues need resolution through extensive testing and analysis.

Additionally, TSMC's first-generation silicon photonics product, the compact universal photonics engine (COUPE), has reportedly reached the validation stage with plans for further development alongside co-packaged optics (CPO) modules. These technologies necessitate additional testing to support initial industry growth stages.

Advantest has recently secured patents for silicon photonic optical loss detection devices in Taiwan and Japan. These devices can identify anomalies in semiconductor light guide chip pathways, such as attenuation, leakage, and disconnection—paving the way for tackling issues prevalent in photonic integrated circuits (PICs) and capitalizing on the silicon photonics market potential.

Advantest's considerable capital expenditure last year initially suppressed profits, yet expectations for a harvesting phase in silicon photonics and advanced process technologies this year suggest improved operations and profitability.

iST continues to bolster its core technologies and customer services, focusing on advanced processes and packaging across five key areas. This includes an emphasis on CPO, TGV (through glass via substrates), and TSV (through-silicon vias) solutions, anticipating dual growth in revenue and profit this year.

HKC is also diligently cultivating advanced processes with an optimistic outlook for steady growth in the Taiwan and Japan markets. With the recent inauguration of their Hokkaido laboratory in Q1 this year, material analysis business continuity and product portfolio optimization should bolster future profitability.

Key Insights Table