Korean Media: TSMC Expands AI Chip CoW Packaging Outsourcing to Address Supply Bottlenecks

According to reports, TSMC (2330-TW)(TSM-US) has decided to outsource its core packaging process, CoW (Chip-on-Wafer), to specialized OSAT (Outsourced Semiconductor Assembly and Test) companies on a large scale. This shift is viewed as a crucial measure to alleviate the current AI chip supply bottlenecks.

TSMC's CoWoS technology belongs to 2.5D packaging and is primarily used in the manufacture of high-performance AI chips. This technology consists of two main stages: the first stage is the CoW process of bonding chips to an intermediate layer (Interposer); the second stage is the WoS (Wafer-on-Substrate) process of bonding the completed CoW chips to the main substrate.

According to Korean media <Electronic News>, in past capacity planning, TSMC mainly outsourced the later WoS process to partners such as ASE, Amkor, and SPIL, while the earlier CoW process was maintained with high self-production and extremely limited outsourcing. However, in response to the current situation, TSMC is significantly expanding the outsourcing ratio of CoW, aiming to combine the production capacity of OSAT partners to jointly expand overall capacity.

The core driving force behind this transformation is led by chip design companies such as NVIDIA (NVDA-US), as well as cloud data center companies actively developing custom chips (ASIC).

According to data cited by <Mydrivers>, NVIDIA has reserved over 50% of TSMC's CoWoS capacity for 2026, amounting to approximately 800,000 to 850,000 wafers. Although TSMC's monthly capacity is expected to double from 70,000 wafers in 2025 to 130,000 to 140,000 wafers by the end of 2026, the report estimates that the supply-demand gap in 2026 will still remain around 20%.

Benefiting from the expansion of CoW outsourcing, major packaging and testing companies have launched large-scale equipment procurement plans. <Electronic News> pointed out that related companies are currently negotiating orders for specialized equipment such as dicing and bonding, which is expected to drive a wave of investment in the packaging equipment industry chain.