Core Viewpoint - TSMC is focusing on advanced packaging as a key growth area, with plans to establish a "General Factory Manager" position to oversee all facilities, likely filled by Chen Cheng-hsien, who has extensive experience in the company [1][2]. Group 1: Advanced Packaging Business - TSMC's advanced packaging business, previously contributing about 6-7% of revenue, is expected to grow significantly due to surging AI demand, particularly for CoWoS technology, which has been in development since 2009 [1][3]. - The gross margin for TSMC's advanced packaging business has reached approximately 80%, contributing significantly to the company's overall profitability [1]. - TSMC is expanding its advanced packaging capabilities with new facilities in Taiwan and Arizona, including two new advanced packaging plants expected to be operational by the end of 2028 [3][4]. Group 2: Leadership Changes - Recent retirements of key executives, including Lin Jin-kun and Yu Zhen-hua, have led to increased attention on TSMC's succession planning and leadership transitions [2]. - Chen Cheng-hsien is anticipated to be promoted to the newly created "General Factory Manager" role, overseeing multiple advanced packaging facilities [2][3]. - TSMC is expected to announce further leadership changes by late January 2026, reflecting ongoing organizational adjustments [2]. Group 3: Technological Developments - TSMC is advancing its CoWoS technology, with new variants like CoWoS-S, CoWoS-R, and CoWoS-L being developed to meet high-performance computing (HPC) needs [4]. - The company plans to introduce a new CoWoS-L technology with a 5.5x larger mask size to address the high demand for this advanced packaging solution [4]. - TSMC is also shifting focus to CoPoS technology, integrating CoWoS with fan-out panel-level packaging (FOPLP), with plans to establish a CoPoS pilot line by 2026 [5].

Investment Rating - The report maintains a rating of "Buy" for relevant stocks in the advanced packaging industry [4][8]. Core Insights - The semiconductor market is expected to reach a valuation of $1 trillion by 2030, driven by AI and HPC, with AI terminals projected to account for 45% of the market share [1][12]. - Advanced packaging technologies, particularly CoWoS, are critical for enhancing chip performance and efficiency, with significant upgrades planned for the coming years [2][70]. - Domestic suppliers in the advanced packaging supply chain are poised for growth due to increasing demand and limited overseas capacity [3]. Summary by Sections Semiconductor Market Outlook - AI is set to lead a new growth cycle in the semiconductor market, transitioning from previous drivers like PCs and smartphones [12]. - TSMC projects a threefold increase in energy-efficient performance (EEP) every two years through process upgrades and advanced packaging innovations [15]. Advanced Packaging Technology - CoWoS technology enables high-density chip integration, significantly improving performance and reducing power consumption [70]. - TSMC's advanced packaging platforms, including CoWoS and SoW, are evolving to meet the increasing demands of AI and HPC applications [53][62]. Demand and Supply Dynamics - Major cloud service providers like Google, Meta, and Amazon are increasing their capital expenditures, indicating a robust demand for AI-related technologies [2]. - The supply of CoWoS is currently insufficient to meet demand, prompting TSMC to expand its production capacity [2][3]. Domestic Supply Chain Opportunities - The report highlights the importance of a self-sufficient domestic CoWoS supply chain in China, as local manufacturers enhance their capabilities [3]. - The rapid expansion of advanced packaging capacity is expected to drive growth in the domestic semiconductor supply chain [3].