TSMC Plans to Raise CoWoS Prices by 10% to 20%, Advanced Packaging Capacity in Critical Shortage

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The explosion in AI demand is forcing up prices for advanced packaging, and TSMC plans to raise CoWoS quotes by 10% to 20%. Institutions believe that advanced packaging is upgrading from a back-end process to a system-level integration platform.

TSMC plans to raise CoWoS quotes by 10% to 20%

On October 27, affected by the explosion in AI demand and comprehensive capacity tightness across the semiconductor supply chain, TSMC plans to raise CoWoS packaging quotes by 10% to 20%. This technology is widely used in high-end AI processors, and demand has now extended from GPUs to server CPUs and custom ASICs.

At the same time, longer AI chip testing cycles are further intensifying supply pressure on packaging and testing capacity. Lead times for chip equipment have also lengthened from 3 to 6 months to 6 to 8 months, and downstream customers no longer have the leisure to bargain: "as long as you can commit to a delivery date, we place the order."

On capacity, analysts expect TSMC's monthly CoWoS capacity to exceed 130,000 wafers in 2026 and rise further to 200,000 wafers in 2027. TSMC Chairman C.C. Wei said that at this stage CoWoS remains customers' first choice, and TSMC is currently the only manufacturer to achieve mass production at the five-reticle scale; its five-reticle-size packaging is already in mass production with excellent yields, and it is continuing to develop nine-reticle and fourteen-reticle-size solutions and advance CoPoS technology.

It is worth noting that the tight capacity situation will be difficult to resolve in the short term. According to supply chain sources, it takes about three years for a new advanced packaging plant from groundbreaking to full load at bottleneck stations, and actual output depends on the processing capacity of stations such as lithography, development and die bonding. In addition, TSMC did not renegotiate prices for this year's annual equipment procurement and placed orders directly at the original prices, which indirectly indicates that current market demand is strong.

The order spillover effect is also emerging. TrendForce data show that even including the new capacity of outsourced packaging and testing providers, the industry supply-demand gap in 2026 will still be about 20%. GlobalFoundries has signed a multi-year agreement with TSMC totaling US$2 billion to expand silicon interposer capacity for the CoWoS ecosystem at its New York wafer fab; ASE's equipment capital expenditure in 2026 is expected to rise about 44% year on year, with FOCoS capacity increasing by more than 300% annually; Intel's EMIB route has also won orders from several external customers including Google.

Advanced packaging accelerates toward a system-level integration platform

Advanced packaging refers to packaging technology that integrates multiple chips at high density into system-level solutions through processes such as 2.5D/3D stacking, Chiplet and fan-out, and CoWoS is one of its mainstream platforms. Driven by the combination of exploding AI computing demand and tight packaging capacity, the industrial value of advanced packaging is being rapidly revalued.

"The growth in AI/HPC demand is driving advanced packaging to upgrade from a back-end process to a system-level integration platform." Huachuang Securities pointed out that the global advanced packaging market is expected to reach US$67.4 billion in 2029, and advanced packaging's share of the global packaging and testing market is expected to rise to about 50%; increasing process complexity is expected to drive the global advanced packaging materials market to grow to 164.7 billion yuan by 2030, with the Chinese market expected to reach 36.5 billion yuan.

China's advanced packaging market is expected to reach about 100 billion yuan in 2029, with a compound growth rate of about 13% from 2025 to 2029. Morgan Stanley pointed out that Chiplet/2.5D will grow fastest, reaching about 17.7 billion yuan in 2029 with a compound growth rate of 40%; the profitability of packaging and testing plants depends on whether capacity can be filled, while equipment makers' revenue depends on whether capacity is under construction, and in this round of capacity expansion, equipment makers are better positioned than packaging and testing plants.

Against the backdrop of tight capacity, Guotai Haitong Securities further pointed out that "TCB equipment is one of the equipment segments with the highest certainty at present." High-density interconnect demand such as HBM4e/5 and 3D Logic will drive the gradual penetration of hybrid bonding, and bonding equipment is expected to become an important node for the value of advanced packaging equipment extending toward the front-end and middle-end.

This judgment echoes the view of Huatai Securities, which believes that AI computing infrastructure construction is driving industrial competition to extend from a single accelerator to system segments such as materials, interconnect, general-purpose computing and advanced packaging; the upgrade of large-size, high-density packaging to glass substrates opens up new application space, and mass production capability will determine the pace of industrialization.

Financing traders position early in multiple concept stocks

According to the East Money concept sector, more than 100 stocks in the A-share market currently involve the advanced packaging concept, with a combined total market value of about 4.47 trillion yuan.

Cambricon ranks first with a market value of 608.7 billion yuan, Northern Huachuang ranks second with 376.4 billion yuan, and AMEC follows closely with 240.9 billion yuan; BOE A, Shenghe Jingwei, Lianxun Instruments, Lens Technology, Tuojing Technology and many other stocks each have market values exceeding 100 billion yuan.

From a capital perspective, East Money Choice data show that in the past week, a total of 23 advanced packaging concept stocks received contrarian bets from financing traders. Among them, Huatian Technology received 69 million yuan in additional leverage funds, Lianxun Instruments and Liyang Chip attracted 54 million yuan and 48 million yuan respectively, and Shenghe Jingwei, Galaxy Microelectronics and Hongshida each received more than 10 million yuan in net financing purchases.

Huatian Technology is focusing on promoting the large-scale mass production of its 2.5D technology platform and has completed the development of processes and technologies such as 2.5D SiCS, Memory vertical wire bonding and FCQFN automotive electronics Wettable Flank, focusing on key markets such as memory, CPU/GPU/AI, CPO and automotive electronics. In the first half of 2026, the company achieved operating revenue of 10.511 billion yuan, up 35.09% year on year, of which second-quarter revenue of 5.711 billion yuan hit a record high for a single quarter. The company is also actively promoting the validation of domestic equipment and materials, and its 2026 revenue target is 20 billion yuan.

Liyang Chip specializes in independent third-party chip testing, with processes covering advanced nodes such as 3nm, 5nm and 7nm. It is vigorously building testing capabilities for AI chips such as CPU, GPU, NPU and ASIC as well as HBM memory chips, and its projects under research include "R&D of the first-generation AI computing chip testing platform" and "Collaborative development of integrated testing systems and software for HBM memory chips." Affected by tight demand for some testing capacity, the company has raised prices for a small portion of its testing services by 10% to 15% since April 1, and expects its AI business to gradually contribute revenue starting in the second half of 2026.

(Source: East Money Research Center) Middle of the main text Embedded advertisement