TSMC(US:TSM)2025-08-15 01:24Summary of TSMC's CoWoS and Advanced Packaging Outlook Company and Industry Overview - Company: Taiwan Semiconductor Manufacturing Company (TSMC) - Industry: Semiconductor, specifically focusing on advanced packaging technologies such as CoWoS (Chip on Wafer on Substrate) and CoPoS (Chip-in-Panel-on-Substrate) Key Points and Arguments CoWoS Capacity and Growth Forecast - TSMC's total CoWoS capacity is projected to reach 675k wafers per month (wpm) by the end of 2025, with a forecast of 1.08 million wpm by the end of 2026, representing a 61% year-over-year (YoY) growth [5][62] - The company anticipates further expansion to 130k wpm by the end of 2027 [5][13] - CoWoS capacity has seen significant growth, with a 100% YoY increase noted in early 2024 [11] Utilization Rate and Production Adjustments - TSMC's CoWoS utilization rate (UTR) is expected to be in the low 90s in 1H26, with a return to full capacity anticipated in 2H26 as new projects enter mass production [5][57] - Adjustments in nVidia's orders have led to a production mismatch, impacting the UTR and causing some expansion timelines to shift [5][50] Customer Allocation and Market Dynamics - nVidia is projected to maintain a 50.1% market share in CoWoS capacity allocation for 2026, slightly down from 51.4% in 2025 [6][62] - Broadcom is expected to become the second-largest customer, with an allocation of 187k wpm, benefiting from multiple projects entering mass production [62] Advanced Packaging Technologies - TSMC is focusing on several advanced packaging technologies, including CoWoS, CoPoS, and WMCM (Wafer-level Multiple-Chip Module), with CoPoS expected to enter high-volume production by 2028 [5][21][35] - CoWoS has evolved from a niche solution to a critical component in AI and high-performance computing (HPC), driven by the demand for larger memory bandwidth [10] Strategic Partnerships and Outsourcing - TSMC is collaborating with OSAT partners like ASE and SPIL to manage the increasing demand for CoWoS, with expectations that outsourcing will accelerate in 2026 and 2027 [40][42] - The company has invested significantly in expanding its advanced packaging capabilities, including a US$100 billion investment in the U.S. for new fabs and R&D centers [46] Challenges and Future Outlook - The semiconductor industry faces challenges such as production bottlenecks and mismatches between upstream and downstream production, which TSMC is actively addressing [52] - The demand for AI-related products is expected to remain strong, with TSMC's management indicating improved demand compared to previous forecasts [52] Conclusion - TSMC is positioned as a leader in the advanced packaging sector, with aggressive expansion plans and a strong customer base, particularly in the AI and HPC markets. The company's strategic partnerships and investments are expected to support its growth trajectory in the coming years [7][46]