TSMC(US:TSM)2026-01-20 02:15Summary of Key Points from Conference Call Records Industry Overview - The focus is on the advanced packaging sector, particularly in the semiconductor testing and packaging industry, which is experiencing heightened market attention due to capacity constraints and rising material costs [1][2]. Core Insights and Arguments 1. CoWoS Capacity Shortage TSMC's CoWoS (Chip on Wafer on Substrate) is undergoing continuous expansion, yet the capacity remains insufficient. This has led to demand overflow to other packaging and testing companies such as ASE and KYEC, resulting in tight capacity [1]. 2. Rising Material Costs The prices of precious metals like gold, silver, and copper are on the rise, with gold prices increasing over 70%, silver prices rising over 170%, and copper prices up approximately 36% from early to late 2025. This surge in material costs is expected to lead to price hikes in metal packaging materials [1]. 3. Strong Demand for Storage The demand for storage solutions, particularly from DRAM and NAND Flash manufacturers, is robust. Companies like Powertech, HwaCom, and Nanya are seeing a surge in orders, pushing capacity utilization rates to near full capacity. Recent price adjustments for testing and packaging services have reached increases of up to 30% [2]. 4. Potential for Further Price Increases Several packaging companies have indicated that due to overwhelming orders, there may be a second wave of price increases in the near future [3]. 5. Increased Capital Expenditure (Capex) Projections - TSMC's capital expenditure for 2026 is expected to exceed initial forecasts. - ASE has continuously raised its capex projections. - KYEC's capex for 2026 is projected to reach a historical high of 39.4 billion New Taiwan Dollars. - Changdian Technology is also increasing investments, with a capex of 8.5 billion for 2025. - Tongfu Microelectronics is planning a total investment of approximately 3.5 billion for storage and computing testing projects. - Yongxi Electronics intends to invest 2.1 billion for a factory in Malaysia. This indicates that 2026 will be a significant year for capital expenditures in both domestic and international packaging companies, benefiting upstream equipment and materials sectors [4]. Other Important Insights - The overall trend in the semiconductor packaging industry suggests a tightening of capacity and increasing costs, which could present both challenges and opportunities for investors in related sectors. The anticipated capital expenditures signal a strong commitment to growth and expansion within the industry [4].