TSMC Rises Nearly 1% Pre-Market: Partners With Xintec on Advanced Packaging, First-Phase Line Expected to Begin Mass Production in 2029

TradingKey - As of press time on November 13, Eastern Time, TSMC (TSM) was up 0.89% in pre-market trading at $409.09.

Taiwan-based semiconductor packaging and testing firm Xintec announced on November 13 that its board of directors approved a resolution to enter into a capacity outsourcing agreement with TSMC, under which the two parties will collaborate on backend processes for advanced packaging. The agreement runs through December 31, 2033, with the initial production line expected to enter mass production in 2029.

[Source: TradingView]

Founded in 1998, Xintec primarily provides wafer-level packaging, wafer testing, and sensor packaging services, with products applied in consumer electronics, communications, automotive, and other sectors. As a specialized wafer-level packaging service provider, the company will further expand its presence in the advanced packaging market through this collaboration.

According to Xintec's announcement, the collaboration aims to meet the growing demand for advanced packaging driven by artificial intelligence, high-performance computing (HPC), and data center applications.

Xintec plans to build a production line at TSMC's facility in the Central Taiwan Science Park and will be responsible for equipment investment, manufacturing, and operations. To support initial capacity buildout, the company's board of directors also approved a plan to issue NT$15 billion (approximately $457 million) in convertible bonds, with the proceeds to be used for related capital expenditures.

Xintec will be responsible for investing in production equipment and automated material handling systems (AMHS), becoming a partner for the oS module in TSMC's advanced packaging supply chain.

With TSMC's support, both parties will jointly ensure that the new production line's technical specifications, product quality, and yields meet the requirements of TSMC and its major global customers.

With rising demand for AI servers and high-performance computing chips, advanced packaging capacity has become an important factor affecting chip deliveries. Many high-performance AI accelerators require the integration of computing chips with high-bandwidth memory (HBM), placing higher demands on packaging technology and production capacity.

TSMC's move to engage Xintec in backend processes will help increase external supply capacity and provide support for future AI chip production. However, the new production line is still several years away from mass production and will not directly add available capacity in the short term, with the actual contribution dependent on equipment procurement, facility construction, and subsequent production progress.

For investors, going forward, key areas to monitor include whether Xintec's new production line can commence operations as scheduled and whether TSMC's advanced packaging orders can sustain growth.

Overall, this partnership spanning more than seven years helps TSMC arrange its medium- and long-term packaging capacity, but its short-term impact on financial performance is limited, with actual revenue contributions expected to materialize gradually only after the new line enters production.