TSMC to Build Two Additional CoWoS Facilities, Disproving Order Reduction Speculations

A recent report from Economic Daily News indicates that TSMC, Taiwan Semiconductor Manufacturing Company, is planning to construct two new CoWoS facilities at the Phase III site of Southern Taiwan Science Park (STSP). The investment for these facilities is estimated to exceed NTD 200 billion, with construction expected to commence as early as March 2025. The two new facilities are projected to be completed by April 2026, following which equipment installation is likely to begin.

The Southern Taiwan Science Park Administration has acknowledged TSMC’s submission of a land lease application but has not disclosed details about the specific development plans of the company. However, TSMC Chairman C.C. Wei has reiterated the company’s commitment to expanding CoWoS production capacity during a recent earnings call.

Industry sources mentioned in the report suggest that the new CoWoS facilities at the STSP will cover a land area of 25 hectares, surpassing the size of the ChiaYi facility, which spans 20 hectares.

Speculation arose recently about NVIDIA potentially reducing its CoWoS orders from TSMC, as highlighted in the report. However, NVIDIA CEO Jensen Huang dismissed these rumors during a visit to Taiwan, stating that there has been no decrease in CoWoS demand and revealing an increasing requirement for CoWoS production, especially for CoWoS-L capacity.

Looking ahead to 2025, NVIDIA plans to strategically promote the utilization of CoWoS-L technology in its B300 and GB300 lines, thereby driving the demand for advanced packaging solutions. TrendForce estimates indicate that driven primarily by the demand for NVIDIA’s Blackwell, the share of CoWoS-L is anticipated to rise from approximately 15% in 2024 to 50-60% in 2025, making it the dominant segment in this regard.

TSMC has an expansion plan in place to develop eight CoWoS facilities in the near term, the report mentions. This includes two facilities at ChiaYi Science Park Phase 1 and two facilities acquired from Innolux (AP8). While two additional facilities were initially planned for ChiaYi Science Park Phase 2, the land will not be available until at least January 2026. As a result, TSMC is focusing on constructing two CoWoS facilities at the STSP Phase III site. Locations for the remaining two planned facilities are still under evaluation.