China’s semiconductor industry is accelerating investment in advanced chip packaging, with nearly 10 publicly announced projects worth approximately 400 billion yuan unveiled between May and July 2026.

The latest investment wave signals a shift from conventional semiconductor assembly and testing toward high-value heterogeneous integration, driven by growing demand for artificial intelligence (AI), high-performance computing (HPC) and next-generation automotive electronics.

The projects span key advanced packaging technologies, including 2.5D and 3D packaging, Chiplet integration, Fan-Out packaging, high-density redistribution layer (RDL), advanced flip-chip and automotive semiconductor packaging.

Major Investments Target AI Packaging Capacity

Several large-scale projects are leading the latest expansion.

JCET announced a 7.8 billion yuan advanced packaging facility in Shanghai’s Lingang area focused on:

• High-density RDL
• Ultra-fine-pitch bumping
• Large-scale heterogeneous integration
• Chiplet packaging for AI servers and HPC applications

Meanwhile, Yongshuo Electronics plans to invest 10.3 billion yuan over eight years to establish a high-end packaging base in Zhejiang Province supporting:

• 2.5D integration
• Flip-chip packaging
• Wire bonding
• Automotive control chips
• AI edge processors
• Analog integrated circuits

In Shanghai, Zhengzhuo Xincheng Microelectronics, a subsidiary of Union Semiconductor, has also launched a 7.5 billion yuan advanced packaging project focused on ultra-fine interconnect technologies and heterogeneous integration.

Automotive Semiconductor Packaging Expands

Automotive electronics have become another major investment area.

Among the announced projects:

• HKC is investing 4 billion yuan in Shaoxing to manufacture automotive-grade semiconductor packages and power devices with planned capacity of 20 million units per month.
• Huaxinbang Technology announced a 2 billion yuan project in Sichuan targeting compound semiconductor and industrial control packaging.
• Mingtai Microelectronics is expanding its Chengdu facility with a 5 billion yuan second phase, adding QFN, flip-chip and system-in-package (SiP) production lines designed to increase annual capacity by 10 billion units by 2027.

Memory Packaging Benefits from AI Demand

Growing AI workloads are also driving investment in advanced memory packaging.

Huatian Technology is expanding its Nanjing operation with 3 billion yuan dedicated to advanced memory packaging, including:

• High Bandwidth Memory (HBM)
• SSD controller testing
• Advanced packaging processes

Meanwhile, Biwin Storage has launched a 1 billion yuan packaging project in the Greater Bay Area focusing on fan-out memory packaging and storage-computing integration technologies.

Industry Shifts Toward Advanced Integration

The latest investment cycle differs from previous semiconductor expansion phases, which largely emphasized manufacturing capacity.

Instead, the new projects focus on technologies required for increasingly complex semiconductor architectures.

Three major trends are emerging:

• Larger investment scale, with projects increasingly valued in the multi-billion or even tens-of-billions-of-yuan range.
• Advanced heterogeneous integration, including Chiplet, 2.5D and 3D packaging technologies for AI and HPC processors.
• Regional industry clustering, with new facilities located near wafer fabrication plants and automotive manufacturing hubs to strengthen semiconductor supply chain collaboration.

Advanced Packaging Becomes a Strategic Growth Area

As AI processors continue increasing in complexity, advanced packaging has become one of the fastest-growing segments of the semiconductor industry.

Rather than serving only as the final manufacturing stage, advanced packaging now plays a critical role in improving chip performance, power efficiency and system integration.

China’s latest investment wave indicates that manufacturers are positioning advanced packaging as a strategic capability supporting AI infrastructure, high-performance computing, automotive electronics and next-generation semiconductor development.

Last Updated on 03/08/2026 by Jota Machinery