Episode summary
Dylan Jovine | The Secret AI Supply Chain Stock Set to Surge
Summary
Dylan Jovine argues that investors are focusing on the wrong part of the AI chip stack, with too much attention on design winners like Nvidia and AMD and manufacturing leader TSMC. He says the overlooked third step is advanced packaging, which is becoming far more important as chipmakers move away from single large chips and toward chiplets that must be assembled with greater precision.
He describes packaging as no longer a simple, low-margin shelling process. Instead, it now requires sophisticated engineering to stack memory, logic, and sensors together while managing heat and improving efficiency. That shift, he says, is creating a new kind of competitive advantage for the company at the center of this work, even though most investors still treat packaging as a commoditized business.
Jovine also says this packaging company is strategically important to Apple, Nvidia, and Elon Musk’s AI ambitions, including AI 5. He argues that once a firm crosses the threshold into next-generation packaging at scale, rivals will need years of investment and engineering to catch up.
Key takeaways
- Dylan Jovine says AI investors have focused on design and manufacturing, while packaging is the underappreciated third step in the semiconductor chain.
- He argues advanced packaging is moving from a low-margin shelling business to a high-value engineering process built around chiplets and heat management.
- Jovine says Apple, Nvidia, and Elon Musk’s AI ambitions all depend on the same packaging company, giving it strategic leverage.
- He believes the company’s scale and accumulated know-how could create a durable competitive advantage that would take years for rivals to replicate.
Notable quotes
“the opportunity and we're onto packaging now, this is the opportunity really I don't think people are perceiving correctly here”
“It's no longer about putting a plastic shell around a silicon chip and shipping it. Those days are gone”
“They're separating memory from logic, sensors and they're stacking them together like microscopic LEGO blocks”
“what the world doesn't understand yet is now there's value in the packaging”
“you're going to have a serious competitive advantage that people I'm afraid don't perceive yet”
How the episode opens
Good morning, this is Dylan Jovine from Behind the Markets. Happy Tuesday. Today is Tuesday, April 21st.
I am excited for our webinar today at 1:00 and I'm not excited because we're doing a webinar. I'm excited because of the company we're talking about, the opportunity that I think we've really nailed on here and it really ties into what I talked about yesterday. Yesterday we talked about the three steps of actually making semiconductors.
Step one is design. Step two is basically manufacturing and then step three is packaging. Now, what's really interesting here is we understand the big winners in design of these chips, Nvidia, AMD, used to be Intel.
These have been terrific successes historically and especially since the AI boom started in 2022. So, the designers have done super well, okay? The manufacturers have done super well, TSMC you think of.
My goodness, that stock has been such a big winner since AI has come out. Their business is just doing gangbusters. It's unbelievable.
But, the opportunity and we're onto packaging now, this is the opportunity really I don't think people are perceiving correctly here and that's what we're going to be discussing today at 1:00. See, the reason we don't know of a big famous company in this field and the reason that's about to change is because packaging used to be kind of simple. You take chips and you package them.
But now it's changed, it's become a very sophisticated process. It's no longer about putting a plastic shell around a silicon chip and shipping it. Those days are gone.
It's just not the way it is because the manufacturers are no longer making these one massive perfect chips anymore, which has become increasingly expensive and difficult. So, what they do is their engineers, the manufacturers are now breaking it down into chiplets.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai supply chain
- advanced packaging
- semiconductor value chain
- chiplets
- ai investors underestimating packaging
Companies and tickers mentioned
- NVDA
- AMD
- TSM
- AAPL
- Nvidia
- Advanced Micro Devices
- Taiwan Semiconductor Manufacturing Company
- Apple
Watch the episode
Watch “Dylan Jovine | The Secret AI Supply Chain Stock Set to Surge” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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