TSMC expands CoWoS outsourcing to meet AI chip demand

Taiwan Semiconductor Manufacturing Co. (TSMC) announced plans to outsource portions of its Chip‑on‑Wafer‑on‑Substrate (CoWoS) advanced‑packaging process to outsourced semiconductor assembly and test (OSAT) firms such as ASE Technology Holding. The move is intended to relieve capacity pressure and support the surge in AI accelerator orders from companies including Nvidia, AMD and Broadcom, as TSMC currently accounts for roughly 90% of the global AI‑chip market.

The outsourcing effort is part of a broader shift in the OSAT sector. In Taiwan, firms are accelerating capacity expansion through multiple channels. In the United States, a new advanced‑packaging hub is being built in Arizona, while China is exploring Huawei’s proposed “Tau Scaling Law” to reshape its OSAT competition. These divergent strategies reflect each region’s industrial base and the growing importance of advanced packaging for AI, high‑performance computing and chiplet architectures.