Momentum is building in advanced packaging glass core substrates, but revenue realization remains a medium- to long-term story

Overview

This report focuses on the latest progress of display supply chain manufacturers entering advanced packaging glass applications within the Asia Pacific and Greater China technology hardware industry. Morgan Stanley points out that glass offers cost advantages from larger panel sizes in advanced packaging, while potentially providing better electrical performance, lower signal loss, lower warpage risk from coefficient of thermal expansion mismatch, and stronger mechanical strength. As chip and package sizes continue to grow, display supply chain manufacturers hope to leverage their existing capabilities in glass-related processes to capture this opportunity.

Core views

The core view is that advanced packaging glass is receiving more attention, and display supply chain manufacturers have already made clear project progress, which should help industry sentiment in the short term, but it will still take time before meaningful revenue contribution materializes. Lens Tech, Innoux, BOE, and AUO are advancing in glass core substrates, TGV, copper electroplating, LEO antenna modules, and Micro LED optical modules, respectively. However, the current challenge is not simply equipment capability, but process control and yield improvement under higher precision and density requirements. If these manufacturers continue improving yield, the report believes they may capture a sizable share of value-add during the mass-production stage.

Analysis framework

The report uses supply-chain progress tracking and company project mapping, focusing on comparing display supply chain manufacturers' partners, pilot or mass-production timelines, target applications, and technical bottlenecks across glass core substrate-related technology paths. The main analytical thread centers on the potential advantages of glass materials in advanced packaging and whether the display supply chain can transfer its existing glass-processing experience to higher-precision semiconductor packaging processes.

Methodology notes

• Supply chain analysisTracking progress in the advanced packaging glass supply chain

  Assess the commercialization pace of new technologies through project partnerships, pilot lines, mass-production timelines, and key process bottlenecks.

  The report does not use financial modeling or valuation derivation, but instead relies on channel checks and supply-chain project progress to judge when glass core substrates may move from sentiment catalyst to meaningful revenue contribution.

• Technology commercialization assessmentAssessment of material advantages and process bottlenecks

  Compare glass's advantages in advanced packaging in terms of cost, electrical performance, warpage control, and mechanical strength, while identifying yield and process control risks.

  The report believes the potential value of glass is clear, but the display supply chain needs to prove it can meet the higher precision, density, and stability requirements of advanced packaging.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Lens Technology (300433.SZ)

  It is working with Intel to advance TGV-enabled glass core substrates, one of the latest industry developments highlighted in this report.

  Strengths

  It has already announced a public partnership, its pilot line is expected to be ready by the end of 2026, and it may also be engaging other potential Korean customers.

  Weaknesses

  More meaningful mass-production shipments may not come until 2H27, limiting near-term revenue contribution.

  Comparison

  Compared with some peers still in planning stages or on a later mass-production timetable, Lens Tech's project timeline is further ahead.

  Risks

  Yield, process control, customer validation, and mass-production cadence may fall short of expectations.

• Innoux (3481.TW)

  It is participating in glass core substrate projects related to TSMC and Ibiden.

  Strengths

  Its partners are key players in the advanced packaging ecosystem, giving the project supply-chain validation significance.

  Weaknesses

  The expected mass-production timeline is relatively late, potentially in 2H28 or 2029.

  Comparison

  Compared with Lens Tech, commercialization is on a later timetable; compared with AUO, which still lacks a clear timeline, the mass-production window is more defined.

  Risks

  Risks from tighter advanced packaging specifications, including precision, density, yield, and customer qualification.

• BOE (000725.SZ)

  It is cooperating with Chinese and North American fabless customers on glass-core-related projects and plans to enter the full glass-core ABF substrate process.

  Strengths

  It has experience in display glass processing and is planning to cover a more complete process flow; if all goes well, it could build capacity in 2027 and reach mass production in 2028.

  Weaknesses

  The timeline still depends on smooth project execution, and the full ABF substrate process is relatively complex.

  Comparison

  BOE's strategy is more oriented toward expansion across the full process flow, while Lens Tech and Innoux disclosures are more concentrated on cooperation in glass core substrate projects.

  Risks

  Risks in capacity construction, customer ramp-up, process control, and yield ramp.

• AUO (2049.TW)

  It plans to use glass in LEO antenna modules and Micro LED optical modules.

  Strengths

  Its application directions are related to its display and optical module capabilities, providing a foundation for technology transfer.

  Weaknesses

  The report has not heard a clear mass-production timeline, and commercialization visibility is lower than for projects with an identified production window.

  Comparison

  Compared with the main glass core substrate theme, AUO's direction is more focused on specific module applications, and the timeline is also less clear.

  Risks

  Uncertainty around end-demand realization, product definition, customer validation, and mass-production timing.

Key data

• Report date2026-07-26 08:47 PM GMTTime disclosed on the report cover page.
• Industry viewIndustry View In-LineGreater China technology hardware industry view.
• Lens Tech progressPilot line expected to be ready by end-2026; more meaningful mass-production shipments may begin in 2H27The company announced cooperation with Intel on TGV-enabled glass core substrates, and the report's channel checks also suggest it may work with other potential Korean customers.
• Innoux progressMass production may come in 2H28 or 2029The report says Innoux is cooperating with TSMC and Ibiden on a glass core substrate project.
• BOE progressPlans to build capacity in 2027 and, if all goes smoothly, start mass production in 2028BOE is working with fabless customers in China and North America and aims to complete the full glass-core ABF substrate process.
• AUO progressNo clear mass-production timeline has been heard yetAUO plans to focus on glass applications in LEO antenna modules and Micro LED optical modules.
• Morgan Stanley global equity rating distributionOverweight/Buy 42%; Equal-weight/Hold 43%; Underweight/Sell 15%As of June 30, 2026, the disclosure table shows total coverage of 3,668 stocks and ADRs.

Impact & implications

In terms of investment implications, news related to glass core substrates is more likely to first be reflected as a thematic catalyst for advanced packaging and the display supply chain, rather than making an immediate earnings contribution. The more critical variables to track are whether each manufacturer can move from pilot lines to stable yield and volume shipments. If yield improvement progresses smoothly, processes such as TGV and copper electroplating could become important sources of value-add for display supply chain manufacturers during mass production; if process control falls short, the commercialization timeline may be pushed back.

Risks

• Process control for glass core substrates in advanced packaging is more difficult than in the display supply chain's existing businesses, with significantly higher precision and density requirements.
• Slower-than-expected yield improvement could delay mass production and revenue recognition.
• Current progress is more likely to improve market sentiment, while near-term substantive revenue contribution remains limited.
• There is uncertainty around customer validation, capacity construction, and supply-chain cooperation pace.
• Morgan Stanley discloses investment banking, shareholding, or other service relationships with multiple covered companies, and investors should pay attention to potential conflicts of interest.

What to watch

• Whether Lens Tech's pilot line is ready on schedule by the end of 2026.
• Whether Lens Tech can achieve more meaningful mass-production shipments in 2H27.
• Whether Innoux's glass core substrate project with TSMC and Ibiden maintains its 2H28 or 2029 mass-production window.
• Whether BOE can build capacity in 2027 and start mass production in 2028.
• Ongoing improvement by display supply chain manufacturers in TGV, copper electroplating, yield, and process control.
• The actual adoption pace of glass core substrates in AI, high-performance computing, and larger package sizes.