What it is
Traditional chip packaging encloses a single chip, but advanced packaging goes further by integrating several components, such as CPUs, GPUs, and high-bandwidth memory, either side-by-side or stacked vertically. This integration shortens electrical pathways, reduces power consumption, and enhances overall system performance beyond what is achievable with a single, monolithic chip. Techniques like 2.5D (e.g., CoWoS, Chip-on-Wafer-on-Substrate) and 3D stacking are key examples.
Advanced packaging is crucial for high-performance computing, especially for AI accelerators, where maximizing data throughput and minimizing latency are paramount. Companies like TSMC, Intel, and Samsung are investing heavily in these technologies, which are often discussed in earnings calls and industry reports. As traditional process node scaling slows, advanced packaging becomes a primary driver for performance improvements, influencing the design and cost of next-generation chips.
Why it matters
Advanced packaging is vital for pushing chip performance limits, particularly for AI, and influences the capabilities and costs of the most advanced processors.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice