Exclusive MUF and LMC for 2026 Apple Chips, New CoWoS Beneficiary, Eyeing Global High-Gross Margin LMC Market Worth Over NT$10B
Key Research Points and Conclusions
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Eternal has outcompeted Japanese rivals Namics and Nagase to secure its first-ever role as an advanced packaging materials supplier to TSMC, with mass production scheduled for 2026.
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Eternal will be the exclusive supplier of MUF and LMC for Apple’s 2026 iPhone and Mac processors, respectively, and is positioned to become TSMC’s exclusive or primary CoWoS LMC supplier as early as 2027–2028.
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Securing its first-ever high-gross margin advanced packaging materials order from TSMC is a major milestone for Eternal, marking a structural upgrade to its product portfolio. Passing TSMC’s qualification sets a strong precedent, with global OSATs likely to adopt Eternal’s materials, positioning the company to benefit from the NT$10 billion-plus global LMC market. Long-term growth will be driven by higher-gross margin underfill orders.
Industry Survey Updates
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In 2H26, the iPhone 18’s A20 processor packaging will shift from InFO to WMCM (Wafer-level Multi-Chip Module). WMCM uses MUF (Molding Underfill), which integrates underfill and molding processes, reducing material consumption and process steps to improve yield and efficiency.
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The high-end M5 processors in the 2026 MacBooks will continue to use separate underfill and molding processes.
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Eternal has passed TSMC’s qualification to supply MUF for the A20 WMCM (competing with Namics) and LMC for the high-end M5 molding (competing with Nagase) as the exclusive supplier.
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Since Mac processor LMC specifications are similar to CoWoS requirements, TSMC is validating Eternal’s LMC for CoWoS applications. Shipments could start in 2026, with Eternal expected to become the exclusive or primary supplier as early as 2027–2028. The company would also benefit in 2029 from CoPoS’s roughly 30% increase in LMC usage due to a larger package footprint.
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In industry parlance, LMC (Liquid Molding Compound) used in packaging molding is sometimes referred to as LCM (Liquid Compression Molding).
Business and Technology Trend Analysis
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TSMC’s proactive adoption of new Taiwanese suppliers to maintain cost competitiveness and R&D flexibility was a key factor in Eternal securing these orders.
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Advanced backend packaging materials—being composite materials—are more complex to design and produce than frontend materials, which are primarily single-molecule. This space has long been dominated by Japanese suppliers with gross margins of 50–70% or higher. Eternal’s securing of these orders from TSMC, the world’s most influential foundry player, represents a major breakthrough for Taiwanese suppliers.
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While MUF orders could theoretically lead to supplying underfill or LMC as well, technical barriers suggest that Eternal’s near-term growth will focus on replacing Japanese LMC suppliers, with higher-gross margin underfill orders as a medium- to long-term target.
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MUF must balance low viscosity with small particles and high filler loading with large particles, while also overcoming rheology control challenges during dispensing and warpage control issues—making it highly complex to manufacture.
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TSMC purchases less than 10% of global packaging materials, with OSATs purchasing the rest. TSMC's adoption of Eternal's materials will set an important example for global OSATs. At least OSATs partnering with TSMC are expected to gradually adopt Eternal's packaging materials, providing strong future growth momentum.
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Eternal could begin supplying CoWoS LMC as early as 2H26, benefiting from both rising CoWoS demand and CoPoS’s 30% increase in material usage.
Analysis of Eternal’s Potential Benefits
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Eternal’s advanced packaging materials are expected to achieve gross margins above 40%, significantly higher than the company's current 20%.
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Eternal’s shipments of MUF and LMC to TSMC are estimated to contribute a single-digit percentage to the company’s 2026 revenue — a modest contribution, but a major milestone in the long-term structural improvement of its product portfolio. Including CoWoS LMC, TSMC’s advanced packaging materials are projected to contribute 10–15% of Eternal’s revenue by 2027.
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According to research firm Valuates, the global LMC packaging materials market value is forecast to grow from NT$18 billion in 2027 to NT$30 billion in 2031. TSMC’s order serves as a strong endorsement of Eternal’s technical capabilities, positioning the company to benefit from the high-gross margin, NT$10 billion-plus global LMC market in the coming years.
