TSMC significantly boosts CoWoS capacity targets, delays CoPoS, amid surging AI chip demand

TSMC is significantly increasing its CoWoS advanced packaging capacity target from 110,000 wafers per month to over 140,000 by the end of 2026, with further expansion in 2027 and 2028. This adjustment includes adding a new P2 factory at its AP8 plant in Taiwan Southern Science Park and reconfiguring the P2 and P3 lines at its Chiayi AP7 plant from SoIC to CoWoS production. The ramp-up for CoPoS technology has been delayed to 2029 and may be concentrated in TSMC's Arizona facilities. This aggressive expansion is driven by overwhelming demand from customers like NVIDIA, Google, and MediaTek, who are placing urgent orders and competing for capacity. TSMC is reportedly considering Yunlin for new advanced packaging facilities and plans at least two more in Arizona. The company underestimated the growth of AI chip demand, leading to a persistent shortage in advanced packaging capacity for the next three years.