TSMC: CoWoS and Advanced Packaging Updates

Nudging up CoWoS capacity further in 2027 and 2028: We are raising our CoWoS capacity estimate for the industry by 4%/6% in 2027/28, led by a minor expansion at TSMC (mostly incremental CoWoS-R capacity) and stronger expansion at OSAT vendors (primarily for CPU projects). We now expect TSMC's CoWoS capacity to reach 200K/225K wfpm by end 2027/28 with around 10k wfpm of additional CoWoS-R expansion to fulfill Vera CPU and AI ASIC demand. The faster expansion is at OSATs, whose combined capacity is likely to reach 60K/95K wfpm by end 2027/28, primarily focused on CPUs and expansion of CoWoS-R and similar applications. CoWoS demand-supply gap is now in the 10% range, and has shrunk a bit recently, with leading edge wafers and substrate becoming the bigger bottlenecks for AI customers. SoIC activity is picking up in 2028, with NVDA Feynman likely to adopt A16 on A16 logic-logic SoIC stacking for the compute dies;