TSMC to Build Two More CoWoS Plants, NT$200B Investment

TSMC is significantly ramping up its advanced CoWoS packaging capabilities, with plans to build two new CoWoS factories in the third phase of the Southern Taiwan Science Park (STSP). The investment is expected to exceed NT$200 billion, reinforcing the company's commitment to expanding its high-performance computing (HPC) production capacity.

This expansion adds to TSMC's ongoing construction of a new CoWoS facility in the Jiayi Technology Park, which is already well underway. Industry experts anticipate that TSMC will soon increase its total CoWoS capacity by eight factories, with at least six located in STSP. This expansion is seen as a direct response to rumors about potential CoWoS order reductions, reaffirming TSMC's dedication to meeting growing customer demand for advanced semiconductor packaging.

In response to inquiries about the rumors, the STSP administration confirmed that TSMC has indeed applied for land leases, but declined to disclose specific development plans. TSMC's Chairman, Dr. Mark Liu, made it clear during an investor conference last week that the company is committed to continuously expanding its CoWoS production capacity to satisfy the increasing demand.

The expansion plans follow reports that major clients, including Nvidia, have exceeded expectations in terms of demand for high-performance computing orders. Contrary to rumors of order cuts, Nvidia's CEO, Jensen Huang, recently visited Taiwan and confirmed that there has been no reduction in CoWoS demand. On the contrary, Nvidia plans to increase its demand for CoWoS-L packaging.

Sources familiar with the matter indicate that TSMC's investment in the new STSP CoWoS facilities is substantial. The land area for the new factories in STSP's third phase will span 25 hectares, larger than the 20-hectare plot for the Jiayi facility. Given that TSMC's Jiayi CoWoS facility is estimated to cost around NT$200 billion, the new STSP facilities are expected to follow a similar investment trajectory, with a budget starting from NT$200 billion.

TSMC's commitment to expanding its CoWoS capacity is far from symbolic. Industry insiders report that the company plans to begin construction as early as March, with land acquisition for the new facilities expected to be finalized by then. The two new CoWoS plants, along with an office building, are slated for completion in April 2026, with equipment installation expected shortly after.

Driven by the strong demand for AI applications, supply chain sources indicate that TSMC is preparing to build a total of eight new CoWoS factories in the near future. This includes two already constructed in Jiayi's first phase, and plans to repurpose the existing plants in the Chi Mei facility. While the original plan for Jiayi's second phase included two additional factories, the delay in land handover until January next year has led TSMC to shift its focus to STSP, where land is immediately available. As of now, TSMC is evaluating locations for the remaining two facilities.