TSM.US has increased the layout of the “second main battlefield”! Three more advanced packaging plants to be built

The Zhitong Finance App learned that according to reports, TSM.US will add three new advanced packaging plants to the second phase of the Chiayi Science Park construction plan in southern Taiwan. At the groundbreaking ceremony for the second phase of the project held last Sunday, relevant sources announced the expansion plan and said, “Today's groundbreaking ceremony marks the official launch of the second phase of the project, which will include the third and fourth plants.”

The source said that the park, which covers an area of about 90 hectares, will develop into an advanced packaging industrial settlement led by TSMC. The report said that the two advanced packaging plants in the first phase of the plan began mass production last month. He said that after all four factories are put into operation, the Chiayi Science Park is expected to generate an output value of more than 300 billion NTD (about 9.35 billion US dollars) and create more than 9,000 jobs every year. He also said that the Chiayi Science Park will work with other important science parks in Taiwan to build a complete artificial intelligence (AI) and semiconductor industry corridor.

In recent years, as demand for AI computing power has exploded, packaging has jumped from a traditional back-end process to a core strategy that is on par with wafer manufacturing. TSMC is a global leader in the field of advanced packaging. It mainly meets the demand for AI chips through technologies such as CoOS, InFO, and SoIC, and is accelerating the evolution to next-generation technologies such as glass substrates (CoPOS). According to overseas industry analysis, mass production of CoPOS panel-level packages is expected to be postponed to 2029, while SoIC stacking technology will also achieve mass production of more advanced nodes in the same year.

As the AI arms race intensifies, the packaging production capacity bottleneck has not been alleviated since the end of 2022, and has become one of the core pain points limiting the AI chip supply chain. Despite major manufacturers expanding production and advancing new technology, the tight supply situation continues.

The cost of manufacturing processes below 3nm has skyrocketed and is approaching the physical limit. Simply shrinking transistors can no longer meet the need to “double every 3 months” of AI computing power. The real bottleneck has moved to how to efficiently stack and connect computing chips, HBM memory, and power management chips — that is, advanced packaging. CowOS is currently the only 2.5D/3D packaging solution that has been verified on a large scale. Without it, the H200, B200, MI300X, and the newly-released next-generation AI GPUs can only stop “waiting to be assembled” on the production line, no matter how well-made. It's no exaggeration to say that the speed of packaging determines the maximum shipping limit for AI chips.

TSMC's CoVos production capacity will continue to be at full capacity from 2024 to 2026, and order visibility is scheduled for 2027. According to TSMC's plan, the compound annual growth rate of CowOS production capacity will exceed 80%, and the compound annual growth rate of SoIC production capacity will exceed 90% from 2022 to 2027. The production capacity growth rate, which almost doubles every year, makes large-scale plant construction an inevitable option.

According to the latest data released by TSMC, thanks to the surge in demand brought about by AI, the company's June revenue was NT$442.68 billion, up 67.9% year on year and 6.2% month on month, and the growth rate far exceeded average market expectations; second-quarter revenue of NT$1.27 trillion, up 36% year on year, better than the average market forecast of NT$1.264 trillion; total revenue for January to June 2026 was NT$244.48 billion, up 35.6% year on year.

TSMC will release its full second-quarter earnings report and hold an earnings conference call on Thursday. Currently, the market generally expects TSMC's adjusted earnings per share for the second quarter to be $3.83 billion and revenue of US$39.32 billion. Some analysts pointed out that at that time, TSMC is expected to raise its annual performance guidelines and simultaneously raise its 2027 capital expenditure plan.