Advanced packaging equipment makers sell the specialized tools needed for 2.5D/3D assembly, hybrid bonding, thermocompression bonding (TCB), and other high-density interconnect processes. Key technologies: - **Hybrid bonding:** direct copper-to-copper connections without solder (next-gen, led by [[BESI - Hybrid Bonding Leader]]) - **Thermocompression bonding:** precise alignment and pressure for chiplet stacking (led by [[Kulicke & Soffa - KLIC]]) - **Fan-out and wafer-level packaging tools:** various suppliers Why they matter: [[OSATs - Outsourced Semiconductor Assembly and Test]] can't build advanced packaging capacity without these tools. Equipment is the picks-and-shovels play. The catch: [[Equipment Tools Cyclicality]]. Tool orders swing violently with customer capex cycles. You can have huge upside when adoption inflects, but brutal downside when customers pause spending. Balance sheet matters more here than for OSATs. Net cash and gross margin resilience separate the survivors from the casualties. Where value exists: buying tool makers when orders are weak but technology adoption milestones keep advancing. The market extrapolates trough conditions, creating entry points. Links: [[Advanced Packaging MOC]], [[OSAT Value Investing Framework]], [[Packaging Capacity Bottleneck]] --- #semiconductors #investing #deeptech