Morgan Stanley Sees AI Chip and Advanced Packaging Demand Surging in 2027

The boom in generative AI and large language models has sharply increased global technology companies' demand for high-performance AI chips. Chip performance can no longer be improved through process-node scaling alone. Advanced packaging, which stacks chips vertically, and high-bandwidth memory, or HBM, which accelerates data transfers, have therefore become critical strategic components for overcoming computing bottlenecks and determining AI hardware performance.

Morgan Stanley forecast in a July 2026 report that the value of wafers consumed for AI computing worldwide would exceed $46 billion in 2027. Demand for CoWoS advanced packaging is expected to nearly double from 1.394 million wafers in 2026 to 2.694 million in 2027. HBM consumption is projected to reach about 50 billion Gb in 2027, potentially driving TSMC's capital expenditure to as much as $75 billion that year.