TSMC Expands CoW Outsourcing to ASE and OSATs to Ease AI Packaging Bottlenecks

TSMC increases Chip-on-Wafer outsourcing to ASE and other OSATs to relieve CoWoS capacity constraints driven by surging AI chip demand from Nvidia and data centers.

Woofun AI reports that TSMC intends to broaden the scope of outsourcing for the Chip-on-Wafer (CoW) segment within its CoWoS advanced packaging workflow, assigning additional orders to ASE and other outsourced semiconductor assembly and test (OSAT) manufacturers. While TSMC previously outsourced primarily the Wafer-on-Substrate (WoS) stage, this shift addresses capacity bottlenecks stemming from escalating demand for AI processors from clients like Nvidia and AI data centers, despite TSMC’s dominant 90% share of the global AI chip manufacturing market.

Industry observers anticipate that OSATs will substantially increase capital expenditure on equipment, particularly for post-process operations such as wafer cutting and bonding. Several South Korean suppliers of laser processing and bonding machinery are currently in negotiations with OSATs regarding the provision of CoW-specific equipment.