Eternal Breaks Japanese Dominance With Exclusive Apple Chip Materials Deal

A new report from TF International Securities analyst Ming-Chi Kuo says Apple supplier Eternal Materials has secured its first-ever advanced packaging order from TSMC. The deal will see Eternal exclusively supply key materials for Apple's 2026 iPhone and Mac processors.

According to Kuo's industry survey, Eternal has outcompeted Japanese rivals Namics and Nagase to become the exclusive supplier of Molding Underfill (MUF) for Apple's A20 processor and Liquid Molding Compound (LMC) for high-end M5 Mac chips, with mass production scheduled for 2026. In 2H26, the iPhone 18's A20 packaging will shift from InFO to Wafer-level Multi-Chip Module (WMCM) technology, which integrates underfill and molding processes to reduce material consumption, streamline steps, and improve yield. The A20 chip is slated for the iPhone 18 Pro and foldable models.

The high-end M5 chips will continue to use separate underfill and molding processes, but since the LMC specifications for Mac processors are similar to those for TSMC's CoWoS packaging, Eternal is also being validated for CoWoS applications and could become the exclusive or primary supplier as early as 2027–2028. Kuo also notes Eternal could benefit in 2029 from CoPoS's roughly 30% increase in LMC usage due to its larger package footprint. A redesigned MacBook Pro featuring the subsequent M6 chip is expected in late 2026.


Kuo says TSMC's proactive adoption of a new Taiwanese supplier to maintain cost competitiveness and R&D flexibility was a key factor in Eternal securing these orders. Advanced backend packaging materials are more complex to design and produce than frontend materials, and this space has long been dominated by Japanese suppliers with gross margins of 50–70% or higher. Margins on Eternal's advanced packaging materials are forecast to top 40%, roughly double its current 20%. Shipments of MUF and LMC to TSMC are estimated to contribute a single-digit percentage to 2026 revenue, with advanced packaging materials projected to account for 10–15% of revenue by 2027.

Kuo views the deal as a major milestone for Eternal, breaking the long-standing dominance of Japanese suppliers in the high-gross-margin advanced packaging materials space. Passing TSMC's qualification is seen as a strong endorsement that will likely lead other global semiconductor assembly and testing companies to adopt Eternal's materials. According to research firm Valuates, the global LMC packaging materials market is forecast to grow from NT$18 billion in 2027 to NT$30 billion in 2031, positioning Eternal to benefit from the high-gross-margin, NT$10 billion-plus segment in the coming years.

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