Taiwan Semiconductor Manufacturing Company (TSMC) is stepping up its efforts to expand its CoWoS (Chip on Wafer on Substrate) advanced packaging capacity with plans to double its monthly capacity to 75,000 wafers by 2025. This ambitious objective comes amid heightened demand for high-performance chips, powered by key clients like Nvidia. TSMC's strategy includes repurposing the facilities acquired from Innolux to establish Advanced Packaging Fab 8 (AP8), dedicated to this production.

In addition to building its own capacity, TSMC is collaborating with packaging partners such as ASE Technology and Amkor to collectively reach the 75,000 wafers per month target by 2025. CEO C.C. Wei emphasized the current supply-demand imbalance in CoWoS, highlighting the company's ongoing expansion efforts to achieve equilibrium by 2025 or 2026. Meanwhile, SemiWiki's analysis projects that Nvidia will command 63% of the CoWoS demand in 2025, followed by Broadcom, AMD, and Marvell with smaller shares.

The CoWoS technology, a 2.5D advanced packaging solution from TSMC, is designed for high-performance computing chips, including Nvidia’s H100 and B100 GPUs. By stacking multiple chips and memory, CoWoS enhances overall performance. TSMC currently employs CoWoS-S, CoWoS-L, and CoWoS-R configurations, with plans to move towards larger mask dimensions supporting more HBM memory in the coming years, propelling further advancements in packaging technology.

As Moore's Law approaches physical limits, semiconductor giants like Samsung and Intel are racing to boost chip performance using advanced packaging. Samsung’s I-Cube and X-Cube, and Intel’s EMIB and Foveros technologies present formidable competition in this high-stakes arena. In this competitive landscape, yield rates remain a crucial differentiator, with TSMC leveraging its extensive production experience, while peers innovate to reduce costs and complexity.

TSMC’s robust market presence doesn't guarantee future dominance, as demand for high-performance computing continues to grow, placing pressure on achieving supply-demand balance. Asenso-LCGC Science partners like ASE and Amkor, though well-established, face challenges due to limited experience in front-end processes.

The semiconductor industry is closely watching how advanced packaging like TSMC's CoWoS will reshape the technological landscape. Not only is TSMC's capacity expansion a response to technological evolution, but it also reflects the strong market demand driving these developments. Balancing capacity with demand while maintaining a technological edge will be crucial for TSMC and its competitors in the coming years.