Chip Packaging As Next Front In The Tech Wars
Date
12/19/2023 12:13:18 AM
(MENAFN- Asia Times) A rising number of Chinese chip design firms are placing orders with chip packaging companies in Malaysia in a bid to diversify their supply chains and protect their operations against intensifying US chip export controls.
These Chinese firms are reportedly engaging Malaysian chip packaging service providers to assemble a type of graphic processing unit (GPU) that can be used in artificial intelligence training, Reuters reported on December 17, citing three unnamed sources.
The Chinese requests only entail assembly in Malaysia, a low-technology process that does not contravene any US restrictions, the Reuters report said.
Some contracts have already been agreed, according to two people familiar with the situation. Chinese chip firms are worried that China's chip-packaging sector will be the next target of the US curbs, the same sources claimed.
Some analysts said if the US imposes restrictions on China's chip packaging sector, it will do so to achieve two goals: One, to get better control of supply chains for commodity products that can create national security concerns, and two to maintain its broad lead on China in chip technology.
Unisem, a Malaysian chip packaging firm owned by China's Tianshui Huatian Technology, said it is seeing rising opportunities from Chinese clients.
“Due to trade sanctions and supply chain issues, many Chinese chip design houses have come to Malaysia to establish additional sources of supply outside of China to support their business in and out of China,” Unisem chairman John Chia said according to news reports.
He said most of his company's customers are from the US. He said he was not too worried about whether his company would provoke the US by packaging GPUs for Chinese customers.
According to Intel, the US accounts for 3% of the world's chip packaging capacity as it targets mainly the advanced packaging market due to its high labor costs.
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