The AI Bottleneck
CoWoS advanced packaging is THE constraint on global AI chip deployment. Despite quadrupling capacity over two years, it has been fully booked continuously. Every major AI accelerator — from NVIDIA Blackwell to Google TPU — requires CoWoS packaging, and there is no alternative at scale.
Monopoly Economics
CoWoS pricing is set by TSMC without competitive pressure — customers have no alternative at scale. The outsourcing strategy to OSAT partners is capital-efficient: TSMC retains the highest-value CoWoS-L work while partners handle commodity packaging.
The Next Frontier
SoIC 3D stacking goes beyond CoWoS by enabling vertical chip stacking with bumpless bonding. This could enable revolutionary compute-near-memory architectures for next-generation AI chips. TSMC's leadership in 2.5D (CoWoS) positions it strongly for the 3D transition.