TSMC is reportedly "rushing" towards improving CoWoS production as the immense demand from the markets starts to gobble up the whole supply chain.
TSMC Faces Massive Demand For Its Packaging Technology From The AI Markets, Leading To a Supply Chain Bottleneck
For those unaware, TSMC's CoWoS advanced packaging plays a crucial role in the development of an AI accelerator, which is why, since the start of the AI frenzy, the technology has been in massive demand. The Taiwan giant has been upscaling its production on a monthly basis now, and despite large-scale efforts, TSMC is still unable to fulfill the market demand. Ctee now reports that TSMC's CoWoS supply is experiencing a massive bottleneck amid NVIDIA's Blackwell demand, and the firm is now reportedly double-down on production by the end of 2025.
TSMC's supply is insufficient because no other competitor can replicate the technology sufficiently, so companies have no other option but to place their orders with the Taiwan giant. Apart from NVIDIA, firms like Apple, MediaTek, Google, and Amazon are too "rushing" to get a stake in the production lines for their respective AI hardware, which has caused TSMC to see a surge in demand, especially this quarter.
Regarding the specific figures, TSMC's CoWoS production capacity is currently said to be at 36,000 units per month, and the Taiwan giant aims to take this figure up to 90,000 pieces by the end of next year. And given that TSMC's work on upscaling facilities and building new ones continues as planned, the firm aims to take CoWoS production up to 130,000 pieces by 2026, marking almost a 4x production increase in just a matter of one year. The Taiwan giant is also set to implement CoWoS price bumps as well, to cater to the massive demand.
It looks like all the demand from the AI segment is coming towards TSMC, with the semiconductor giant getting all the spotlight it needs. Not just CoWoS, but the company has shown its dominance with processes, notably 5nm and 3nm, which indicates that TSMC is the way to go for major manufacturers to get their demand catered to. For competitors like Samsung and Intel, they are nowhere to be seen now.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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