Taiwan Semiconductor Manufacturing Co. has raised its capital-spending guidance for advanced packaging, signaling robust demand for artificial-intelligence accelerators used by cloud-computing giants. The world's largest contract chipmaker is accelerating expansion of CoWoS (Chip-on-Wafer-on-Substrate) capacity, a bottleneck technology for high-performance AI chips.
Executives told analysts that AI-related revenue is expected to grow at a compound annual rate above 50% through 2028, driven by Nvidia, AMD and custom silicon programs at Amazon, Google and Microsoft. The company is converting additional cleanroom space at its Taichung and Kaohsiung facilities and is evaluating new sites overseas to diversify geographic risk.
The capacity push underscores a structural shift in the semiconductor industry. AI training and inference workloads require not only leading-edge logic chips but also high-bandwidth memory (HBM) and sophisticated packaging that integrates multiple dies. CoWoS and its variants have become the choke point, with lead times stretching into 2025.
Equipment makers in Japan and the Netherlands are among the beneficiaries, as TSMC orders more lithography, etch and inspection tools. Local Taiwanese suppliers of substrates, chemicals and testing services are also seeing order visibility improve.
Investors reacted positively, sending TSMC's Taipei-listed shares to a record high. MetalSemi Asia believes the AI build-out will remain a multi-year driver for Asia-Pacific semiconductor capital spending, although cyclical weakness in smartphone and PC chips could create near-term revenue volatility.
