TSMC's Growth Engine is CoWoS
tengyanAI · x · 2026-07-13
The core insight here is that TSMC's growth engine is driven by CoWoS advanced packaging, with AI/HPC demand pushing this capacity chain near long-term saturation.
Key points from BofA include:
- Advanced packaging demand is projected to expand 8x by 2028, with continuous undersupply expected during this period.
- Gross margins will likely remain in the 60%+ range, even factoring in the 2nm node ramp and summer electricity costs.
- 2026 CapEx will continue to focus on capacity expansion and pricing adjustments, with 2Q26/3Q26 revenue growth primarily driven by HPC and AI demand.
This is a classic observation from the AI compute supply chain and manufacturing side: the focus isn't on models, but on AI's sustained pull on advanced packaging, capacity, pricing, and profit structures.
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