TSMC expands CoW packaging outsourcing, with ASE and other OSATs taking on CoW capacity to alleviate AI chip manufacturing bottlenecks

According to the Electronic Times, TSMC plans to further expand the outsourcing scale of the CoW (Chip-on-Wafer) segment in its CoWoS advanced packaging, entrusting more packaging orders to ASE and other OSAT manufacturers. CoWoS is TSMC's 2.5D packaging technology that connects AI processors such as GPUs with HBM through an intermediary layer, where CoW is the step of combining the chip with the intermediary layer, and WoS is the step of packaging the substrate. Previously, TSMC mainly outsourced the WoS segment, with only a small portion of CoW being entrusted.

This move aims to alleviate the packaging capacity bottleneck caused by the continuous surge in demand for AI chips. TSMC holds about 90% of the global AI chip manufacturing market, but as the demand for self-developed chips from manufacturers like Nvidia and AI data centers skyrockets, capacity has become difficult to meet. Industry insiders expect OSATs to significantly increase equipment investment, especially in post-process areas such as wafer cutting and bonding. Several laser processing and bonding equipment suppliers in South Korea have been confirmed to be negotiating with OSATs regarding the supply of CoW equipment.