The chip manufacturing industry can be quite complex, and that’s normal. After all, there are multiple factors that go into the performance of a SoC, making it a success or directly ruining a good design. Chip packaging technology is one of the main keys, and TSMC also dominates in that section. That said, Qualcomm could shake the foundations of the industry by depending less on TSMC’s advanced packaging services in favor of UMC’s.
What is a chip packaging technology?
Packaging technology is not the first thing you’ll hear about when talking about chips. Parameters like the manufacturing process, core architecture, core speed, and even factories used to manufacture the chip tend to stand out more. However, good packaging technology is important to ensure that all the technologies implemented work properly.
Chip packaging helps protect the SoC from potential damage related to corrosion and other situations. However, the most important thing for many is probably that it determines the quality of the connection of components on the chip’s PCB. Basically, the packaging tech “encapsulates” all the chip’s technology securely. In turn, it can even help boost performance. For example, more advanced packaging technology can shorten the distance between the chip components and the PCB. This translates into lower latency (faster and more efficient task performance).
Qualcomm reportedly sets deal for UMC’s advanced chip packaging tech, challenging TSMC
Now that you have a very brief context, you need to know that, for a long time, TSMC has been the leader in the segment. Yes, the Taiwanese company not only offers the most reliable chip manufacturing factories and wafers that all the big brands are looking for. They also provide their own packaging technology—called CoWoS—for the chips they produce. In addition to manufacturing its flagship chips at TSMC, Qualcomm utilizes their packaging technologies.
That said, a new report claims that Qualcomm has reached an agreement with United Microelectronics Corporation (UMC) to implement its “advanced packaging” technology in its chips. Qualcomm may be the first major player to “dare” leave TSMC in this particular segment.
The main reason for the movement could be Qualcomm’s need to ensure a constant supply of advanced chips. Since TSMC is the biggest player in chip manufacturing, many big companies are constantly looking for them. So, the availability of TSMC’s technology is not consistent enough to give Qualcomm any guarantees.
Plus, it seems that UMC has made notable strides in its advanced packaging technology. Reports claim that it is on par with TSMC’s in terms of performance. It is also possible that they offer more competitive prices compared to TSMC. All of these factors could have led Qualcomm to make a decision that could cause a “knock-on effect” in the industry. After all, if a well-known company suddenly shows interest in a certain technology, others will follow.
TSMC will continue to manufacture Qualcomm chips
Anyway, the report claims that Qualcomm is far from abandoning TSMC completely. The company will continue to rely on TSMC factories to produce its flagship SoCs. After all, TSCM seems far superior to its competition in chip manufacturing.
Qualcomm is also not expected to completely stop using TSMC’s chip packaging services. However, they could begin to use chips with UMC’s technology in 2026. 2025 will be a year of test production to determine whether they can continue smoothly to the mass production stage.
