Cathay Pacific Haitong: TCB deterministic volume hybrid bonding platformization opens a second growth curve

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that AI/HPC is driving the expansion of demand for GPU/ASIC and HBM, and that TCB equipment is currently one of the most certain equipment links. Demand for high-density interconnections such as HBM4e/5 and 3DLogic will drive the gradual penetration of D2WHB. HBM is expected to be introduced from key interfaces in the early stages, and the penetration rate of HB in high-end bonding will continue to expand as the number of stacking layers and interconnection requirements increase. Bonding equipment is expected to become an important node in extending the value of advanced packaging equipment forward to the middle.

Cathay Pacific Haitong's main views are as follows:

AI/HPC drives the transmission of advanced packaging capital expenses to middle and back channel equipment. TCB equipment is currently one of the most deterministic equipment links

The bank believes that AI/HPC is driving the expansion of demand for GPU/ASIC and HBM. As the number of HBM stacks increases and the penetration rate of 2.5D/3D packages increases, traditional flip packages face constraints in interconnection accuracy, warpage control, and ultra-fine pitch interconnection. TCB has become the mainstream solution for HBM with its advantages of high-precision alignment and temperature and pressure control. The reduction in pitch spacing will also drive some TCB equipment to migrate to Fluxless TCB. Currently, Fluxless TCB has received orders in the logic field, and storage vendors have begun verification related to HBM4e.

Hybrid bonding has the advantages of high interconnection density, low power consumption and low thermal resistance. With the upgrade of HBM and 3DLogic, it is expected to become the core technology direction

Although hybrid bonding requires a large investment in the early stages, it has obvious advantages in interconnection density, bandwidth density, and energy efficiency, and due to scale effects, HB's single interconnect cost is also expected to be significantly lower than TCB. The bank believes that demand for high-density interconnections such as HBM4e/5 and 3DLogic will drive the gradual penetration of D2WHB. It is expected that HBM will be introduced starting with key interfaces in the early stages, and will continue to expand the penetration rate of HB in high-end bonding as the number of stacking layers and interconnection requirements increase.

The investment value of hybrid bonding lies not only in the increase in equipment demand, but also in the increase in equipment value and the spillover of industrial chain value brought about by platformization

The bank believes that D2W hybrid bonding places higher requirements on wafer surface flatness, cleanliness, activation and alignment accuracy, and promotes the evolution of bonding equipment from a single host to an integrated platform for integrated cleaning, plasma activation, and in-situ measurement. The Kinex and SUSS D2W/W2W platforms in collaboration with AMAT and BESI all reflect the trend of device platformization. As hybrid bonding equipment enters mass production, processes such as cleaning, CMP, and measurement are also expected to benefit from process specification upgrades, and bonding equipment is expected to become an important node for extending the value of advanced packaging equipment forward to the middle.

Looking at TCB's order elasticity in the short term, and HB's platformization capabilities in the medium to long term

The bank believes that ASMPT has both advanced logic and HBMTCB requirements, and extends to Fluxless TCB and HB, and has strong short-term and mid-term performance flexibility; BESi products cover FC, TCB, and HB, have leading advantages in hybrid bonding customers and platformization capabilities, and have long-term benefits from increased HB penetration; Hanmi is deeply bound to HBM customers and is still a beneficiary of the current HBM expansion; K&S has entered the high-end bonding market with Fluxless TCB and has room to catch up for a long time.

Risk warning: risk of AI downstream demand falling short of expectations; risk of extended delivery of core equipment limiting capacity expansion; risk of delays in HBM adoption of hybrid bonding; risk of technology substitution and route differentiation.