China's OSATs chase bigger role as AI chips strain packaging supply

Surging AI chip demand is compelling Chinese OSATs to leap from legacy packaging into high-barrier domains like 2.5D/3D integration. This technical cascade accelerates domestic sourcing of critical upstream materials—silicon interposers, HD substrates—while forcing chip designers to re-architect for new packaging paradigms. Yet U.S. export controls on advanced packaging tools have turned compliance risk into a hidden tax, inflating capital costs for TSV or hybrid bonding lines. Competitors like ASE and Amkor will likely lock in capacity with NVIDIA and AMD, whereas JCET and TFME may pivot to Chiplet-based heterogeneous integration as a workaround. Within 18 months, packaging will evolve from a cost center to a strategic chokepoint: control over CoWoS-like capacity equals pricing power in AI chip delivery.