TSMC's First CoWoS Advanced Packaging Plant in Chiayi Expected to Complete and Install Equipment by End of 2026

Summary

To meet strong demand from AI and high-performance computing, TSMC is expanding its advanced packaging capabilities. The company's first CoWoS (Chip-on-Wafer-on-Substrate) plant in Chiayi Science Park is expected to be completed and begin equipment installation by the end of 2026. This is part of a broader strategy to double its CoWoS capacity in the coming years.

Impact Analysis

This isn't just another fab; it's TSMC reinforcing its position as the critical tollbooth for the entire AI industry. While everyone focuses on chip design, the real bottleneck is advanced packaging. Customers like Broadcom are already flagging that TSMC is nearing capacity limits, with tight supply expected to persist TradingView. The late 2026 completion date for this Chiayi plant signals that there's no near-term relief .

This sustained tightness gives TSMC incredible pricing power and forces customers into long-term deals to secure supply. The market sees the AI demand, but might be underestimating the duration and margin benefits of this packaging squeeze. By doubling down on CoWoS, TSMC isn't just adding capacity; it's widening its moat against competitors and ensuring it captures a larger slice of the high-margin AI value chain. This move makes their massive $52-56 billion capex plan for FY2026 look less like spending and more like cementing a multi-year monopoly TECHi.