ASICs and CPUs move to center stage, driving the next wave of CoWoS expansion

Following UBS Taiwan Summit (Day 1, Day 2&3) and our CoWoS industry analysis, we are further raising CoWoS industry capacity to 270kwpm from 260kwpm end-2027E, up from 160kwpm end-2026E. Current visibility suggests requirement for further CoWoS capacity expansion in 2028, even with Intel's EMIB-T and TSMC's CoPoS ramping for large package AI accelerator in 2028-29. We believe the trend reflects more robust Cloud AI chip demand, especially from CPUs and ASICs, which should mostly stay at CoWoS in 2028-29. CoWoS supply continues to diversify: ASE's expansion reaches 70kwpm by end-2027E from 20kwpm end-2026E, vs TSMC/Amkor at 180kwpm/20kwpm. After several years of investment, hyperscalers and AI natives are making solid progress on custom silicon. We estimate Microsoft Maia 200/300 units of 50/350k in 2027, OpenAI's Jalapeno may ramp to 600-700k units in 2027E, Meta's MTIA targets ~450k units, while Google TPUs and Amazon Trainium reach 9m/3.2m packages in 2027. We raise Nvidia's AI GPU p