For decades, semiconductor leadership has been defined by transistor scaling. Shrinking nodes, increasing density, and driving Moore’s Law forward were the primary measures of technological progress. Yet as physical limits approach and fabrication capacity lags demand, the industry is shifting focus to a new frontier, which is advanced packaging. Far from being a secondary step, packaging now determines how chips interact, how systems scale, and how performance keeps pace with the world’s growing computational needs. Erik Hosler, a strategist in emerging technologies, highlights that the future of leadership will hinge not only on fabs but also on breakthroughs in design integration. His perspective reflects the growing recognition that packaging is no longer peripheral, but central to sustaining competitiveness.
The United States, long dependent on offshore packaging capacity, now faces the challenge of integrating this capability into its broader semiconductor strategy. While building new fabrication plants is a multi-year endeavor, advanced packaging offers a nearer-term pathway to offset limitations in leading-edge capacity. By embracing chiplets, 3D integration, and heterogeneous architectures, the U.S. can secure both resilience and leadership. Understanding the role of advanced packaging in the semiconductor ecosystem and why it must be part of America’s strategy for technological advantage is essential.
Why Packaging Matters More Than Ever
Traditionally, packaging was considered the final stage of semiconductor production. It includes encasing chips in protective materials and providing the electrical connections needed for integration into devices. Today, however, packaging has developed into a field of innovation in its own right.
Advanced packaging enables chips to communicate more efficiently, combine distinct functions, and deliver higher performance without relying solely on transistor scaling. In a world where Moore’s Law is slowing, packaging offers a parallel pathway for progress. By allowing multiple dies to work together as a cohesive unit, it multiplies capability even when fabrication nodes plateau.
For the U.S., leadership in packaging is essential because it reduces reliance on scarce leading-edge nodes while unlocking new performance metrics. Instead of waiting for fabs to catch up, packaging makes it possible to accelerate innovation in a more distributed, modular way.
Chiplets and Modular Design
One of the most transformative shifts in advanced packaging is the move toward chiplets. Rather than designing massive monolithic chips, engineers can now design smaller functional units that are integrated through packaging. This approach offers several advantages, such as improving yields, lowering costs, and allowing flexibility in combining distinct functions.
For example, a high-performance processor can integrate chiplets designed for AI acceleration, memory, or graphics, each produced using the most suitable process. This modularity reduces dependence on a single fabrication facility and allows supply chains to spread across multiple sources. The strategy mitigates risk and creates opportunities for specialized innovation.
The U.S. can leverage chiplet design to regain ground in areas where fabrication capacity has shifted abroad. By focusing on the integration stage, American firms can deliver innovative systems even if fabrication remains constrained. In this way, packaging becomes both a technological and strategic tool.
3D Integration and System Scaling
Beyond chiplets, 3D integration offers another leap forward. Stacking dies vertically rather than spreading them out horizontally increases density and reduces the physical distance signals must travel. It translates directly into higher performance and lower power consumption, which are two factors critical for applications ranging from AI to defense systems.
3D integration also enables the mixing of technologies that are difficult to integrate at the transistor level. Logic, memory, and sensors can be layered together, creating systems that are greater than the sum of their parts. For high-performance computing, this means breakthroughs in bandwidth and efficiency without waiting for the next generation of transistor scaling.
In practice, 3D integration offers the U.S. a way to push performance ceilings despite bottlenecks in fab capacity. By investing in this area, the country can position itself as a leader in the packaging race even as fabrication remains distributed globally.
Innovation Across Multiple Sectors
Erik Hosler shares, “It’s going to involve innovation across multiple different sectors.” His point applies directly to advanced packaging, which relies on breakthroughs in materials science, design automation, and manufacturing equipment. New interconnect materials, photonic integration, and cooling solutions are all critical to realizing the promise of chiplets and 3D integration.
Packaging innovation is inherently cross-disciplinary. It requires collaboration between fabless design houses, foundries, equipment manufacturers, and research institutions. Public-private partnerships can accelerate this process, ensuring that advances move from prototypes to scaled production. For the U.S., fostering this ecosystem will be key to translating packaging leadership into sustained competitiveness.
The Policy Dimension
Advanced packaging cannot be separated from broader industrial policy. Incentives to build packaging facilities, invest in workforce development, and fund R&D are all part of the strategic picture. While the CHIPS and Science Act emphasizes fabrication, equal attention must be given to the packaging stage if the U.S. hopes to secure the full supply chain.
Packaging also represents an opportunity for international collaboration. Partnerships with allies that have complementary strengths in materials or assembly can help distribute costs and risks while consolidating secure ecosystems. By coordinating with trusted partners, the U.S. can accelerate innovation while reducing exposure to adversarial influence.
Advanced Packaging as Strategic Advantage
The semiconductor race is no longer defined solely by transistor counts or fab locations. Packaging has emerged as a competitive differentiator, enabling nations to push performance forward even as fabrication slows. For the United States, advanced packaging offers a way to offset lagging fab capacity, reduce vulnerabilities, and chart a path toward leadership in the next era of computing.
Leadership will require more than funding alone. It will demand cross-sector innovation, secure supply chains, and policies that align industry and research. If the U.S. can succeed in building packaging capacity alongside fabrication, it will not only secure resilience but also shape the global trajectory of semiconductor innovation.
The lesson is clear that advanced packaging is not an afterthought of semiconductor production but the frontier. By investing in chiplets, 3D integration, and heterogeneous design, the U.S. can ensure that its leadership in microelectronics is not lost to bottlenecks but strengthened by innovation.