TSMC to source silicon interposers in US under $2b deal with GlobalFoundries

Taiwan's TSMC, the world's largest foundry, has decided to source silicon interposers — a critical component in AI chip production — from within the United States, Yahoo Finance reported Friday (local time).

TSMC already produces semiconductor wafers at its facility in Arizona and is working to establish an advanced packaging production facility there as well. Bringing silicon interposer supply onshore would move the company significantly closer to completing a US-based supply chain covering the major processes in AI chip manufacturing.

Under the deal, US foundry GlobalFoundries (GF) recently signed a silicon interposer supply agreement with TSMC. GF plans to expand production capacity at its factory in Malta, New York, to fulfill the contract.

The agreement is valued at $2 billion over five years, with mass production set to begin in the first half of 2028.

The two companies, which once fought a patent war against each other, have joined forces to establish domestic US production of silicon interposers — a component that has been a source of supply bottlenecks.

A silicon interposer serves as a base and wiring board that places multiple chips — such as GPUs and HBM chips — side by side and connects them. It is a core element of TSMC's advanced packaging technology known as Chip on Wafer on Substrate (CoWoS), used to manufacture Nvidia AI accelerators and other products, and has until now been produced almost entirely in Taiwan.

CoWoS has long been cited as the single biggest bottleneck in AI accelerator supply.

GF said the Malta factory will become the first US-based supplier of silicon interposers as a result of the deal.

Ed Kaste, GF's senior vice president, said advanced packaging is becoming increasingly important in delivering the performance, power efficiency and scale required by next-generation AI systems. "We will leverage our US manufacturing base to create a secure and scalable source of supply," he said.

The two companies had previously clashed in 2019, filing lawsuits against each other in the United States, Germany and other jurisdictions over alleged infringement of semiconductor manufacturing technology patents, before reaching a cross-licensing agreement within two months.

GF stepped back from the race to develop cutting-edge process nodes in 2018 and has since focused on mature processes. Industry analysts note that silicon interposers do not require leading-edge process technology, making the product a natural fit for GF's strengths.

Because HBM supplied by South Korean memory chip makers sits on silicon interposers alongside GPUs, industry observers expect that a shift of packaging operations to the United States could intensify pressure on memory chip suppliers to localize their supply and expand production capacity there as well.

SK hynix plans to build an advanced packaging factory for HBM in Indiana and begin mass production in the second half of 2028.