TSMC Expands CoWoS Chip Production to Meet Growing Demand

Taiwan Semiconductor Manufacturing Company (TSMC) is set to boost its production capabilities for CoWoS (Chip-on-Wafer-on-Substrate) chips in the Central Taiwan Science Park (CTSP). This move comes in response to the rapidly increasing demand for AI GPUs and other high-performance computing (HPC) chips. The decision was driven by strong manufacturing requirements from major clients such as NVIDIA and AMD, as well as a surge in demand for TSMC's CoWoS packaging solutions.

TSMC Chairman, Mark Liu, acknowledged that the demand for advanced packaging capacity is outstripping supply due to the widespread adoption of AI technology. Customers are eager to enhance their production capabilities, prompting TSMC to outsource some high-end packaging and testing orders to specialized foundries while also planning to expand its in-house production. To further optimize capacity, TSMC is implementing unconventional strategies, including transferring a portion of its InFO (Integrated Fan-Out) packaging operations from Longtan in northern Taiwan to the southern Science Park.

According to reports, TSMC aims to increase its monthly CoWoS production from the current 8,000 wafers to 11,000 wafers by the second half of 2023. Notably, NVIDIA and AMD are expected to occupy 70-80% of the expanded capacity, with Broadcom accounting for 10%. Industry insiders predict that TSMC's capacity will continue to grow, reaching 20,000 wafers by the end of 2024, with NVIDIA securing half of the allocation.

This expansion by TSMC underscores its commitment to meeting the rising demand for CoWoS chips, driven primarily by the accelerated growth of AI GPUs and HPC chips in the market. The move will enable electronic component distributors to better serve their customers and ensure a steady supply of these critical components for various industries.