TSMC Urgently to Order Advanced CoWoS Equipment

The rapid rise of generative artificial intelligence (GenAI) is significantly boosting demand for both hardware and software across the semiconductor industry. As the sole supplier of NVIDIA’s advanced AI chips, TSMC (Taiwan Semiconductor Manufacturing Company) is actively expanding its production capacity to meet this increasing demand.

Industry insiders from Taiwan report that TSMC has urgently ordered a substantial amount of CoWoS (Chip-on-Wafer-on-Substrate) packaging manufacturing equipment to enhance its production capabilities. TSMC has indicated in multiple forums that AI servers will generate significant revenue in the coming years, leading the company to revise its capacity planning and place significant equipment orders with its supply chain.

TSMC is projected to remain in expansion mode over the next three years, with new facilities scheduled to come online progressively from Q4 2024 through 2026 in Longtan, Zhunan, Taichung, Tainan, and the newly announced Chiayi AP7 plant.

By late 2024, TSMC’s monthly CoWoS capacity is expected to reach 36,000 wafers, doubling from the previous year. By 2025, this capacity is anticipated to expand further to between 50,000 and 55,000 wafers.

Key supply chain partners, including Honsol Technology, Scientech, GMM Corp, and GPM Corp, are accelerating production to meet these orders. Sources indicate that their production schedules have been extended to 2026 due to the surge in new orders.

Industry sources also report that all AI chip manufacturers are striving to secure TSMC’s production capacity. In addition to NVIDIA, which has pre-booked 50% of TSMC’s capacity for the next three years, major companies such as AMD, Google, Intel, Microsoft, Meta, Amazon AWS, and Tesla are among TSMC’s clients for foundry services.

TSMC has previously stated that AI companies are key clients, and it is projected that by 2028, AI processors for servers will account for more than 20% of TSMC’s overall revenue. TSMC’s revenue is expected to exceed $120 billion by 2028, with at least $24 billion coming from its AI chip business.