TSMC Boosts CoWoS Capacity, Anticipates Doubling in 2024

On November 6th, a corporate report highlights that, due to extended lead times for CoWoS devices, TSMC (Taiwan Semiconductor Manufacturing Company) has proactively addressed the situation. In November, TSMC enhanced its monthly CoWoS production capacity to 15,000 units by integrating InFO (Integrated Fan-Out) packaging technology, with the expectation of doubling its annual CoWoS production capacity in the forthcoming year.

In anticipation of the CoWoS production capacity for the next year, experts project a 100% increase in TSMC's annual CoWoS production capacity. Among this expanded capacity, NVIDIA is predicted to represent approximately 40% of TSMC's total CoWoS production, while AMD is expected to contribute around 8%. Additionally, various components of TSMC's supply chain, aside from the company itself, are poised to enhance their capacity by 20%.

To mitigate potential risks, NVIDIA has strategically broadened its CoWoS production capacity layout beyond TSMC and has engaged with other suppliers, such as UMC (United Microelectronics Corporation), VIS (Vanguard International Semiconductor Corporation), Amkor Technology, and more. The gradual ramp-up of CoWoS production is set to commence in the fourth quarter of this year.

It is noteworthy that several months ago, a surge in demand for NVIDIA's AI GPUs resulted in a substantial shortage of TSMC's advanced CoWoS packaging capacity. During customer conference calls, TSMC's CEO, C.C. Wei, emphasized the necessity of expanding CoWoS production capacity. Equipment manufacturers estimate that TSMC's total CoWoS production capacity for 2023 will surpass 120,000 units, reaching an estimated 240,000 units in 2024, with NVIDIA acquiring a significant share, estimated to be between 144,000 and 150,000 units.

In response to the capacity shortage challenge, TSMC announced a substantial investment of nearly 90 billion New Taiwan Dollars in July, outlining plans to establish an advanced packaging wafer fab within the Hsinchu Science Park, Taiwan. Following two months of inter-departmental negotiations, the Hsinchu Science Park Bureau officially granted permission for TSMC to acquire approximately 7 hectares of land in the Hsinchu Science Park. The new facility is slated for completion by the end of 2026, with production scheduled to commence in the third quarter of 2027. This strategic move is designed to bolster TSMC's capacity to meet the growing demand for advanced electronic components effectively.