Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is reportedly facing overwhelming demand for its Chip on Wafer on Substrate or CoWoS advanced packaging technologies as companies including Nvidia Corp. (NASDAQ:NVDA), Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Amazon.com Inc. (NASDAQ:AMZN) and MediaTek race to secure capacity for next-generation AI chips.
TSMC's CoWoS Lines Are Fully Booked
Orders across TSMC's CoWoS-L and CoWoS-S processes are overflowing, leaving the company with no spare room despite aggressive expansion efforts, reported Taiwan-based outlet Money UDN.
The current CoWoS capacity is in severe short supply, TSMC's chairman previously said during an earnings call, noting that the company is investing heavily to close the gap.
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TSMC Turns To Partners As AI Chip Demand Soars
With demand outpacing internal expansion, TSMC is preparing to outsource parts of its packaging workflow beginning in 2026, the report said.
Supply chain insiders said the company is accelerating collaborations with equipment and packaging partners to ensure that silicon interposers, multi-chip modules and other advanced components can be delivered without delays.
Suppliers, including Hung-Soo, Wan-Run, Hsin-Yun, Chih-Mao, Chih-Sheng, Xun-De, Yu-Tian and Mu-Te are reportedly seeing surging orders as TSMC shifts from a fully in-house model to a hybrid approach.
AI Heavyweights Drive Capacity Buildout Through 2026
Research firm Counterpoint said advanced packaging demand remains strong and expects TSMC's CoWoS-L output to reach 100,000 wafers per month by late 2026, fueled by accelerating GPU and custom ASIC orders from Nvidia.
ASE Technology (NYSE:ASX) is also benefiting from spillover demand.
Despite speculations that Apple Inc. (NASDAQ:AAPL) and Qualcomm Inc. (NASDAQ:QCOM) could explore Intel Corp.'s (NASDAQ:INTC) packaging as a backup, industry sources told the publication that TSMC's deep customer relationships and integrated manufacturing services make large-scale defections unlikely.
TSMC Revenue Jumps On AI Chip Momentum
TSMC said last month that its consolidated net revenue for October 2025 came in at about NT$367.47 billion, an increase of 16.9% from a year earlier and 11.0% higher than the previous quarter.
Revenue from January through October totaled NT$3.13 trillion, up 33.8% compared to the same period last year.
The chipmaker remains a key manufacturing partner for Nvidia's Blackwell AI platform, which continues to experience strong worldwide demand despite shifting U.S. export rules.
TSMC has surged 47.07% year-to-date. Benzinga's Edge Stock Rankings place the company in the 93rd percentile for Quality and the 86th percentile for Growth and Momentum, underscoring its strong performance relative to competitors.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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