Abstract:
As global demand for artificial intelligence and high-performance computing (HPC) chips continues to grow out of control, TSMC, the world's leading foundry, is facing an unprecedentedly severe delivery bottleneck. According to the latest analysis report on the semiconductor supply chain and authoritative industry, TSMC plans to launch a new round of radical expansion in the next few years, with the goal of more than doubling its core CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging production capacity by 2028; at the same time, because the existing production capacity has already been taken over by giants such as Nvidia in advance and is in short supply, a large number of AI chip advanced packaging orders are accelerating to Intel and Taiwanese packaging and testing foundry companies, resulting in large-scale spillover.
In the current large-model infrastructure computing power arms race, the fundamental factor that truly restricts the pace of global AI accelerator card shipments has shifted from the front-end advanced process wafer foundry to the back-end 2.5D and 3D advanced packaging links. With its mature and deep CoWoS technology system, TSMC has been the absolute first choice for the world's top computing power giants such as Nvidia, AMD and Broadcom for many years. However, even though TSMC has continuously doubled its packaging capacity in the past two years, its pace of capacity expansion is still far behind the market's bottomless demand for AI computing power. Industry estimates show that Nvidia alone occupies about 60% of TSMC's total CoWoS production capacity and has locked in more than half of the future expansion quotas in advance; the top three customers have even taken away more than 85% of the production capacity share, causing the lead time of the entire CoWoS production line to be significantly extended to more than 52 weeks to 78 weeks, and the available seats in 2026 and even 2027 have already been booked.
In order to cope with this long-term structural gap, TSMC is accelerating the mobilization of capital expenditure and factory resources, promoting large-scale equipment installation from multiple advanced packaging plants in Taiwan to future emerging bases, and striving to double its monthly production capacity from the current tight state by 2028. However, water far away cannot quench immediate thirst. The extremely tight production scheduling window has brought unbearable waiting costs to downstream chip design customers who are eager to ship, directly triggering an "order spillover effect" that is rare in the history of chip manufacturing.
Due to the inability to obtain sufficient packaging quotas in TSMC's schedule, many leading chip manufacturers, including Advanced Micro Devices (AMD), had to begin to seek diversified production capacity supply solutions and divert some orders and next-generation packaging needs to competitors. As a direct beneficiary, Intel, which is actively betting on the advanced packaging business with the support of U.S. government policy funds, is relying on its EMIB (embedded multi-chip interconnect bridge) and more advanced EMIB-T technology to take on overflow customers, accelerating its goal of hitting the world's second largest advanced packaging service provider; at the same time, Sun and Moon Professional outsourcing semiconductor packaging and testing (OSAT) manufacturers such as ASE, SPIL, Powertech and KYEC have also ushered in an unprecedented wave of orders and performance explosions with more flexible delivery times and gradually mature 2.5D packaging and testing processes.
Semiconductor industry analysts point out that TSMC’s ambitious plan to double CoWoS production capacity by 2028 reflects that AI infrastructure construction is not a short-term pulse, but a long-distance running of computing power infrastructure that lasts several years. Although the overflow of orders has objectively given Intel and third-party packaging and testing factories a strategic breakthrough to seize the ecological voice, for TSMC, prioritizing the existing restricted production capacity to the top core customers with the highest profit margins and the most cutting-edge process technology will also help it maximize the harvest of high gross profit returns. With the in-depth integration of advanced processes and advanced process packaging in the next few years, the battle for production capacity in the advanced packaging field is evolving into the core winner in reshaping the competitive landscape of the entire global semiconductor industry chain.
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