Advanced Packaging (CoWoS): TSMC’s Chip-on-Wafer-on-Substrate Technology

Even when logic and memory exist, GPUs cannot be completed without advanced packaging.

The TSMC Monopoly

TSMC is the only advanced packaging provider at scale:

• “CoWoS capacity is sold out through 2025 into 2026” — TSMC CEO C.C. Wei
• Demand exceeds capacity by 3-4x

Capacity Expansion Roadmap

• 2025: 75K wafers/month
• 2026: 95K wafers/month (+27%)
• 2027: 135K wafers/month (+42%)

Still won’t meet demand.

NVIDIA’s Capacity Lock

• 70%+ — CoWoS share locked by NVIDIA
• ~100% — CoWoS-L (Large) for Blackwell
• Scraps remain for competitors

Why CoWoS Is Critical

• Enables GPU + HBM integration on single package
• Silicon interposer provides 10x wiring density vs organic
• Without CoWoS, chips are built but cannot be finished
• TSMC is the only provider at scale for advanced AI chips

Supply Chain Response

• TSMC Outsourcing (2026): Packaging to ASE Technology, Amkor
• SK Hynix US Plant (Indiana): $3.9B investment, 2028 operational

Focus: Keep advanced nodes in-house. Reduces TSMC dependency.

This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.