On January 17, Taiwan's leading semiconductor manufacturer, TSMC, has reportedly plans to build two new CoWoS (Chip-on-Wafer-on-Substrate) facilities in the Southern Taiwan Science Park (STSP), with an estimated investment exceeding NT$200 billion (approximately RMB 44.5 billion or USD 6.1 billion). This latest move is part of TSMC's aggressive push to expand its advanced packaging capacity, particularly in response to increasing demand from high-performance computing (HPC) clients, such as Nvidia.

The two new plants, expected to be built in the third phase of the STSP, will increase TSMC’s CoWoS capacity significantly. When combined with the ongoing construction of another CoWoS facility at the Jiayi Park, TSMC is expected to expand a total of eight CoWoS plants in the short term. At least six of these will be in the Southern Taiwan Science Park. This expansion will serve as a countermeasure to rumors suggesting a reduction in CoWoS orders.

In response to these rumors, TSMC’s chairman, Mark Liu, confirmed during an earnings call last week that the company is committed to continuing its CoWoS capacity expansion. "We are actively increasing our CoWoS production to meet the growing demand from our customers," Liu stated, countering any speculations of a slowdown in orders. According to industry sources, Nvidia has expressed its intention to increase, not decrease, its CoWoS demand, especially for CoWoS-L, a variant of the packaging technology.

The new CoWoS plants will occupy 25 hectares of land in the third phase of the Southern Taiwan Science Park, larger than the 20-hectare plot at Jiayi. With an investment of around NT$200 billion for the Jiayi facility, the STSP investment will follow a similar scale. Sources familiar with the plans suggest that TSMC intends to begin construction as soon as March, with the facilities expected to be completed and operational by April 2026.

The robust demand from AI applications, especially in areas such as high-performance computing, has been a key driver behind TSMC’s decision to ramp up its CoWoS production. In total, TSMC plans to build eight new CoWoS plants, including the two in Jiayi, and will repurpose the fourth factory in the Tainan plant for two additional CoWoS units. The company is also considering options for the last two plants, though the locations remain under evaluation.

This latest development signals TSMC's dedication to staying ahead of the technological curve, ensuring its position as a global leader in semiconductor manufacturing as demand for AI-driven technologies continues to surge.