The semiconductor war is no longer decided solely by transistor size. Increasingly, the actual performance of a chip depends on how it is “packaged” and interconnected: how dies are stacked, how memory and computing are integrated, and how data movement bottlenecks are reduced. In this context, SMIC — China’s largest contract chip manufacturer — has taken a symbolic and strategic step: establishing a dedicated institute for research and coordination in advanced packaging in Shanghai.
According to industry media reports, the advanced packaging institute was officially introduced at the company’s Shanghai headquarters in late January. The event was attended by SMIC President Liu Xunfeng, Vice Mayor of Shanghai Chen Jie, as well as representatives from the industrial regulator and academic teams from Tsinghua University and Fudan University.
Why has advanced packaging become “the new battleground”
For years, the industry measured its progress through miniaturization (moving from 7 nm to 5 nm, 3 nm, etc.). But the current reality — with increasingly larger, heterogeneous, and specialized chips — has shifted some innovation toward the back-end: the set of techniques that enable multiple silicon pieces to function as a single system.
Concepts such as:
- Chiplets: instead of a single monolithic chip, multiple specialized pieces (dies) are combined.
- Advanced interconnection (RDL, microbumping, TSV): new layers and vias to bring these dies closer and facilitate communication.
- 2.5D/3D stacking and “hybrid bonding”: packaging approaches that reduce physical distances, improving bandwidth and efficiency.
- Coordination with memory and modules: critical for AI and HPC workloads, where performance depends on both computation and timely data delivery.
This shift isn’t just theoretical: global suppliers have been emphasizing for months that packaging capacity and system-level integration have become bottlenecks comparable to wafer yields at advanced nodes.
What exactly is the new institute aiming for?
During his speech, Liu Xunfeng stated that the institute will seek to focus on cutting-edge technologies and common sector challenges, connecting academia, industry, and government to create a collaboration platform “government–industry–academia–research–application.” The declared goal: build R&D capabilities and a collaborative innovation alliance to address key gaps in the ecosystem.
An industry perspective is that these centers not only conduct research but also set priorities, attract talent, develop programs with material and equipment suppliers, and, most importantly, accelerate transitions from lab testing to repeatable, industrial processes.
Context: Industry can no longer separate “manufacturing” from “system”
The creation of an institute dedicated to advanced packaging comes as the market is reshaping its value chain. In the real world, a competitive AI chip no longer depends solely on the node process: it relies on an integrated set including architecture, memory, interposers, substrates, thermal management, and validation. In other words, competitive advantage is built by assembling components… and packaging is the technical glue that holds it all together.
Therefore, SMIC’s initiative is viewed as a move to strengthen a critical part of the supply chain where practical knowledge (materials, processes, metrology, reliability, assembly performance) makes a difference and can take years to mature.
What to expect in the short and medium term
In the absence of more public details on specific research lines, it’s reasonable to expect the institute to act as a catalyst in three main areas:
- Standardize and scale processes: transition from isolated projects to a roadmap with industrial milestones.
- Accelerate collaborations with academia and suppliers: spanning photonics, 3D packaging, materials, and tools.
- Improve the competitiveness of “chiplet-based” products: especially in a market where cost, performance per watt, and delivery speed are as critical as benchmarks.
Ultimately, the message is clear: if modern chip performance is gained “in the package,” then having a dedicated institute transcends corporate branding and becomes a commitment to technological sovereignty… but also to real industrial capacity.