TSMC is currently located in Miaosu Zhunan, an advanced packaging and testing base, which will consist of three connected factories. The SoIC factory will be installed this year, and another 2.5D advanced packaging factory is expected to be completed next year. The advanced packaging and testing base will be operated in a fully automated manner to comprehensively and effectively improve product quality, productivity and flexibility, while maximizing cost-effectiveness.
Liao Dedui said that as advanced process technology advances to 3nm or below, the concept of chip small-chip with advanced packaging has become a necessary solution. In 2020, TSMC's process technology has developed to 5nm, and it is expected that the development of a 5nm SoIC will be completed by 2022. Zhunan Advanced Packaging and Testing Base will be opened at the end of this year to next year, which can strongly support TSMC's 5nm expansion and mass production of 3nm in the future. Previously, TSMC had announced that capital expenditure will reach US$16 billion to US$17 billion (about RMB 103.3 billion to RMB 109.8 billion) this year, with 10% of which will be used in advanced packaging.
In terms of advanced packaging and testing layout, TSMC currently has 4 advanced packaging and testing factories across Taiwan, providing wafer bumps, advanced testing, rear-segment 3D packaging and other businesses. Currently, the main advanced packaging and testing factory is located in Longtan, Taoyuan. As customers' 5nm orders continue to increase, TSMC has begun to actively build advanced packaging and testing bases in Miaosu Zhunan and Tainan Nanke; it is not ruled out that they will go south to Kaohsiung in the future.
TSMC has many customers, and the Apple iPhone 13 A15 processor adopts the 5nm enhanced version (N5P) process technology. Apple's A15 processor has added many AI functions, integrating new memory and related embedded chips, which must be achieved through advanced packaging and testing technology. With the 3D Fabric platform, TSMC provides Apple with an overall solution from chip manufacturing to testing and then to rear-series packaging.
In addition to Apple, its customers include AMD, MediaTek, Xilinx, NXP, and several AI chip companies in mainland China. Nvidia and Qualcomm are expected to be next year. In response to the requirements of manufacturers such as Nvidia, Qualcomm, and NXP, TSMC's 4nm process will be trial-production in the third quarter of this year and will be mass-produced next year. As for the 3nm process, mass production is also planned to be carried out in the second half of next year.
As for TSMC 3D Fabric's advanced packaging technology threatens other packaging and testing plants? Some analysts believe that the main difference between TSMC and other packaging and testing plants lies in the application of advanced processes. TSMC's advanced packaging technology locks customers into top-tier manufacturers such as Nvidia, AMD, and even the future Intel high-end products; while other non-highest-end products will still choose packaging and testing plants such as AMKOR, Changdian, and Sun and Moonlight Project Control.
TSMC focuses on top customers and will not enter the mid- and low-level packaging market for the time being. Wu Tianyu, CEO of Sun Moonlight Investment Control, once said that TSMC's advanced packaging layout is different from Sun Moonlight's operation model and business model, and the customer groups and product applications locked by the two companies are also different.
In addition, Liao Dedui also said that the value provided by TSMC to customers is time to market and quality, and has built a complete 3D Fabric ecosystem, including substrates, memory, packaging equipment, materials, etc.
