The Taiwanese company Eternal Materials has achieved a historic milestone: becoming the exclusive supplier of advanced packaging materials for TSMC in the production of Apple processors set to enter the market in 2026. The firm has surpassed Japanese competitors like Namics and Nagase, traditional leaders in this high-margin segment, and has secured contracts to supply MUF (Molding Underfill) and LMC (Liquid Molding Compound) materials for upcoming iPhone and Mac chips.
This partnership signifies a structural shift in Eternal’s product portfolio, positioning it to compete in a global market valued at over 10 billion Taiwanese dollars, with projected rapid growth in the coming years.
From Technical Qualification to Mass Production
Eternal has passed TSMC’s stringent qualification process, enabling mass production to start in 2026. Specifically:
MUF for the iPhone 18 A20 processor: The packaging will transition from InFO to WMCM (Wafer-level Multi-Chip Module), which integrates filling and molding into a single process, enhancing performance and reducing material consumption.
LMC for the 2026 MacBook M5 processor: Will continue to use separate filling and molding processes, where Eternal previously competed with Nagase.
The LMC for Mac closely approaches the specifications of CoWoS (Chip-on-Wafer-on-Substrate), TSMC’s most advanced packaging technology for AI chips and high-performance computing. This positions Eternal to potentially become the exclusive or primary provider of CoWoS LMC between 2027 and 2028.
A Rapidly Expanding Global Market
According to consulting firm Valuates, the global LMC packaging market is expected to grow from 18 billion Taiwanese dollars in 2027 to 30 billion in 2031. TSMC’s backing offers a significant technical endorsement that could accelerate Eternal’s adoption of packaging materials by OSATs (Outsourced Semiconductor Assembly and Test) associated with the Taiwanese giant, which currently sources less than 10% of global packaging materials.
In the case of CoPoS (Chip-on-Package-on-Substrate), also promoted by TSMC, the use of LMC is projected to increase by about 30%, due to larger encapsulation sizes, directly benefiting Eternal.
Displacing Japanese Dominance
The advanced packaging sector has traditionally been dominated by Japanese suppliers with gross margins exceeding 50-70%. Eternal’s entry marks a crucial step for Taiwanese manufacturers to gain ground in a niche where technical complexity presents a significant barrier to entry.
For example, MUF must balance low viscosity with small particles, but also high adhesive loading with larger particles, while managing rheology during dispensing and warpage deformation. LMC requires precise chemical control and liquid compression management to meet TSMC and Apple’s tolerances.
Impact on Revenue and Margins
While initial MUF and LMC sales to TSMC will constitute a single-digit percentage of Eternal’s revenue in 2026, the strategic importance is much greater. The company anticipates that advanced packaging material sales to TSMC could account for 10-15% of its revenue by 2027, with gross margins exceeding 40%, compared to around 20% currently.
In the medium and long term, Eternal also aims to compete in the high-margin underfill market, a natural progression if it consolidates its position as a preferred supplier for TSMC and global OSATs.
Frequently Asked Questions (FAQ)
What is MUF, and why is it important?
Molding Underfill combines filling and molding of chips into a single process, reducing steps and materials, and improving manufacturing performance in advanced packaging.
What is the difference between LMC and LCM?
In industry, LMC (Liquid Molding Compound) and LCM (Liquid Compression Molding) sometimes refer to the same liquid material used in encapsulation molding.
Why is the TSMC contract significant for Eternal?
Because TSMC is the world’s most influential foundry. Its technical approval validates Eternal in the industry and opens doors for global high-margin contracts.
Will Eternal supply materials for AI packaging?
Yes. The LMC for Mac shares technical requirements with CoWoS, used in AI chips. TSMC is already evaluating Eternal’s LMC for this purpose, with potential shipments starting in 2026.