TSMC Targets 14-Reticle CoWoS Packaging by 2029

Explosive growth in global artificial intelligence infrastructure demand has put CoWoS advanced packaging, an essential technology for high-performance computing chips, in the spotlight. As the world’s leading semiconductor manufacturer, TSMC’s CoWoS capacity directly determines the pace of AI chip shipments from technology giants including Nvidia and AMD. Changes in that capacity have become a key indicator of the global AI industry’s development.

TSMC is aggressively expanding production and is expected to reach monthly CoWoS capacity of at least 200,000 wafers in 2027. However, Nvidia is projected to secure more than half of that capacity, forcing major customers such as AMD to seek alternatives. Some advanced-packaging orders are consequently spilling over to outsourced semiconductor assembly and test providers including ASE Technology Holding and U.S.-based Amkor, fueling an order boom outside TSMC’s supply chain.

The rising number of compute chiplets and HBM stacks integrated into AI accelerators is pushing package sizes toward CoWoS’s physical limits. Poor utilization around the edges of circular wafers also restricts output per batch. TSMC is therefore developing CoPoS panel-level packaging, which uses square substrates to improve area utilization and ease AI chip capacity bottlenecks.

TSMC is advancing CoPoS technology and expects it to enter mass production in 2028. Analyst Ming-Chi Kuo said the packaging could debut as early as the second half of 2028, with Nvidia’s Feynman-architecture chips potentially among the first adopters. TrendForce also said Taiwanese panel makers with an FOPLP technology base could enter the glass-substrate supply chain.

TSMC’s advanced process technology and CoWoS advanced packaging have positioned it to capture demand from AI servers and custom chips developed by major technology companies. CoWoS is a key technology for integrating high-performance computing chips with high-bandwidth memory. The pace of its capacity expansion affects global AI chip supplies as well as order momentum for packaging, testing and equipment suppliers.

Mizuho Securities recently raised its forecasts substantially for TSMC’s CoWoS packaging and advanced process capacity in 2026 and 2027, reflecting continued growth in demand for AI servers and custom chips. The benefits of the expansion are expected to spill over to packaging and testing providers such as ASE Technology Holding and to semiconductor equipment makers. The available event data did not disclose exact capacity figures, financial amounts or the report’s publication date.

TSMC is a major global supplier of advanced wafer fabrication and packaging services, with demand for AI accelerators keeping leading-edge capacity tight. Aletheia Capital believes TSMC's technology leadership and capacity-expansion capabilities will enable it to continue securing AI chip orders, a key driver of medium- to long-term growth.

Aletheia Capital recently reiterated its “buy” rating after a site visit to TSMC and raised its price target to NT$3,500. The firm expects AI demand and expanded capacity in advanced processes and packaging to drive a compound annual growth rate of more than 30% from 2024 to 2027, followed by a potential second wave of accelerating growth in 2028.

TSMC's CoWoS technology integrates computing chips with high-bandwidth memory and is crucial to boosting the performance of AI accelerators from companies such as NVIDIA. Surging demand for AI chips has transformed advanced packaging from a traditionally low-margin assembly and testing segment into a high-value competitive market central to delivery capacity and profitability.

As of July 20, 2026, the average price of a CoWoS wafer had exceeded $10,000, making the technology a new profit engine for TSMC's AI business. TSMC is expanding CoWoS capacity and investing in SoIC and silicon photonics, while Intel is seeking market share with its EMIB packaging technology.