2025-10-09 02:39Investment Rating - The report assigns a "Buy" rating to TSMC and ASE Industrial, indicating a positive outlook for these companies in the semiconductor industry [5][32]. Core Insights - The demand outlook for CoWoS (Chip on Wafer on Substrate) is strengthened due to increased production estimates for Nvidia and Broadcom, with Nvidia's CoWoS demand expected to rise significantly in 2026 [2][4]. - Nvidia's Rubin production at TSMC is on track, with an increase in production units estimated from 1.3 million to 2.3 million in 2026, indicating robust growth potential [3]. - The introduction of Nvidia's new Rubin SKU, CPX, is anticipated to drive further CoWoS demand, with projections showing an increase from 444k units in 2025 to 678k units in 2026 [4]. Summary by Sections Demand Forecasts - Nvidia's CoWoS demand estimates for 2025 and 2026 have been raised by 5% and 26% respectively, driven by higher production units and new product launches [2]. - Broadcom's CoWoS demand for AI accelerators in 2026 has also been revised upwards, reflecting stronger demand from major clients like Google and OpenAI [2]. Production Insights - TSMC's CoWoS capacity is projected to increase from 100kwpm to 110kwpm by the end of 2026, supporting the anticipated growth in demand from Nvidia and Broadcom [2]. - The report highlights that Nvidia's total GPU production units at TSMC are expected to reach 6.9 million and 7.4 million in 2025 and 2026 respectively, up from previous estimates [2]. Stock Recommendations - TSMC is favored as a leading Cloud/Edge AI foundry due to its advanced packaging capabilities, while ASE is expected to benefit from the growth in advanced packaging and testing [5]. - The valuation comparison indicates strong growth potential for both TSMC and ASE, with TSMC's market cap at approximately $1,225 billion and ASE's at $25 billion [5].