TLDR
- TSMC is reportedly set to raise CoWoS advanced chip packaging prices by 10% to 20%, per the Commercial Times.
- AI demand is spreading from GPUs to server CPUs and custom chips, tightening packaging capacity.
- Equipment delivery times have stretched to six to eight months, up from three to six.
- Q3 revenue hit a record NT$1.494 trillion, up 41.2% from a year earlier.
- TipRanks shows a Strong Buy consensus on TSM, with nine Buys and one Sell.
TSMC (TSM) stock slipped 0.39% on Tuesday, while its Taiwan listing (2330) gained 0.63%. The moves followed a Commercial Times report that the company plans to raise advanced chip packaging prices by up to 20%.
Taiwan Semiconductor Manufacturing Company Limited, TSM
According to the report, foundries and third-party assembly and testing suppliers are preparing for price changes of 10% to 20%. The increases apply to chip-on-wafer-on-substrate (CoWoS) packaging, which is widely used in advanced AI processors.
Demand is no longer limited to graphics processing units. Server CPUs and custom application-specific integrated circuits are adding to the load.
Longer test times for AI chips are adding pressure on packaging and testing capacity. Both areas are running tight, per the report.
Equipment is a bottleneck too. Delivery times for new tools now run six to eight months, up from three to six.
Suppliers are struggling to scale up production quickly. Chipmakers are also prioritizing their own delivery schedules.
Capacity Plans and Supply Deals
Analysts cited by the newspaper expect TSMCās monthly CoWoS capacity to top 130,000 wafers in 2026. They see it reaching 200,000 in 2027.
CoWoS puts AI processors and high-bandwidth memory in a single package. The chips go to customers such as Apple and Nvidia.
Earlier this month, GlobalFoundries announced a manufacturing agreement with TSMC. It will produce silicon interposers in the U.S. for CoWoS.
GlobalFoundries executive Ed Kaste said advanced packaging is key to the performance and power needs of next-generation AI systems. He added that U.S. production will provide a reliable supply of key packaging components.
Q3 Results Show Strong Demand
TSMCās third-quarter revenue hit a record NT$1.494 trillion ($46.72 billion). That was up 41.2% from a year earlier and beat estimates by $1.02 billion.
Net income rose 68.7% to NT$763.06 billion ($23.59 billion). Not a bad quarter at all.
Advanced chips did the heavy lifting. Chips made on 7nm and more advanced technologies were 79% of wafer revenue, up from 77% in Q2.
The 3nm process contributed 33%. The 5nm node followed at 28%, 7nm at 10% and 2nm at 8%.
TipRanks lists a Strong Buy consensus on TSM, with nine Buys and one Sell in the last three months. The average price target is $534.60, which implies about 26% upside.
Another report cites an average target of $883, which implies about 95% upside. For the fourth quarter, TSMC expects revenue of $52.3 billion to $54.3 billion.
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