Advanced Chip Packaging Still Bottlenecked in Taiwan
The US scrambles to reduce its dependence on TSMC and Taiwanese partners for critical advanced chip packaging technology.
Advanced chip packaging — the critical process of combining multiple chip components into powerful processors — remains overwhelmingly concentrated in Taiwan. TSMC and its local partners dominate this essential step, creating a supply chain bottleneck that has the US scrambling for solutions.
The technology has become increasingly vital as chipmakers hit physical limits on shrinking transistors. Instead of making individual chips smaller, packaging lets engineers stack and connect multiple chips together for better performance.
Efforts to bring this capability stateside are underway. Subramanian Iyer, a specialist at UCLA, is among those working on advanced packaging techniques. But closing the gap with Taiwan's entrenched ecosystem won't be quick or cheap.
The dependency highlights a uncomfortable truth: even as billions flow into US chip fabrication, the back-end packaging piece remains largely out of American hands. Building fabs is only half the battle.