TSMC to Delay 2026 CoWoS Capacity Expansion

Reports suggest that TSMC has recently informed domestic and international equipment partners to temporarily pause its 2026 equipment procurement and delivery plans, pending further instructions.

Industry observers believe this decision is primarily driven by uncertainties surrounding potential policy changes under a new Trump administration, rather than any shift in the growing demand for AI-related technologies. TSMC aims to reassess its requirements based on evolving geopolitical and economic conditions.

Currently, TSMC is focusing on expanding its advanced CoWoS (Chip-on-Wafer-on-Substrate) production capacity. The company plans to more than double its capacity between 2024 and 2025, with demand consistently outstripping supply. Among its major infrastructure projects, TSMC is progressing on the construction of the AP8 facility, acquired from Innolux's Tainan Plant 4. This site is scheduled for completion between March and April 2025, with equipment installation expected in the latter half of the year and production contributions commencing by late 2025. Negotiations are reportedly underway for the acquisition of a second facility from Innolux to further support this growth. Additionally, TSMC's Chiayi plant is targeted for equipment delivery by late 2025, installation in early 2026, and production ramp-up by the end of that year, with a focus on expanding System-on-Integrated-Chip (SoIC) capabilities.

On the client side, TSMC is set to more than double its CoWoS packaging capacity by 2025. Market insiders indicate that NVIDIA is poised to consume up to 60% of this expanded capacity, while AMD and other ASIC developers are working to secure a larger share.

By 2024, TSMC's CoWoS production is projected to reach 35,000 wafers per month, serving over a dozen key clients, with NVIDIA accounting for more than half of the available capacity. Looking ahead to 2025, monthly CoWoS capacity is expected to climb to 75,000 wafers, with NVIDIA securing 60% through pre-orders. This allocation underscores robust demand for NVIDIA's H200 and Blackwell series, highlighting their significant role in driving TSMC's production strategy.