Overview
TSMC's Chip-on-Wafer-on-Substrate (CoWoS) advanced packaging technology is essential for producing large AI accelerators that integrate HBM.
Capacity Analysis
- 2025 CoWoS capacity: ~35K wafers/month
- 2026E capacity: ~60K wafers/month (70%+ YoY growth)
- Primary customers: NVIDIA (50%+), AMD, Broadcom, Google
Revenue Impact
Advanced packaging contributes an estimated 8-10% of TSMC's total revenue, with margins improving as utilization reaches 95%+.
Investment Implications
CoWoS capacity expansion supports our constructive view on TSM, with the stock trading at 18x forward earnings versus a 5-year average of 20x.