tsmc unleashes 'monster-level packaging' for ai, dwarfing current tech

2025-07-14 tsmc

Taipei, Monday, 14 July 2025.
tsmc is reportedly pioneering a new ‘monster-level packaging’ technology. This tech surpasses existing cowos processes. It is designed to meet the exploding demands of high-performance computing in ai. Elon Musk’s xAI Grok 4 model could be among the first to benefit. This leap could cement tsmc’s dominance in advanced packaging. Investment and key partnerships may follow. The new packaging offers five times the capability of current methods.

advanced packaging leadership

The development of this ‘monster-level packaging’ is a strategic move for TSMC [1]. Advanced packaging is increasingly vital in the semiconductor industry [2]. TSMC is establishing a ‘general plant manager’ system for back-end advanced packaging [2]. This organizational change highlights the growing importance of advanced packaging [2]. It positions TSMC to capitalize on the ai chip market [2]. TSMC’s system on wafer (sow) technology is key to xAI’s Grok 4 model [4]. This technology improves computing power by over five times compared to cowos [4].

manufacturing capacity and market dynamics

TSMC’s cowos capacity is struggling to meet demand, particularly for nvidia’s gb200 chips [3][6]. This shortage creates opportunities for competitors like umc [3][6]. Umc has secured advanced packaging orders from qualcomm [3]. TSMC anticipates that the capacity shortage in advanced packaging will continue until the end of 2025 [3]. However, tsmc’s cowos capacity is expected to increase from 70,000-90,000 units per month to 100,000-130,000 units per month by the end of 2026 [3]. This represents a three- to four-fold increase compared to 2024 [3].

geopolitical risks and tariff impacts

Geopolitical risks, particularly potential tariffs from the us, pose a threat to tsmc [7]. Former us president trump has suggested imposing high tariffs on chips exported from taiwan [7]. These tariffs are described as a ‘kryptonite’ for tsmc, potentially weakening its ai dominance [7]. Even a 10% tariff could significantly impact tsmc’s operating costs and its major clients like apple and nvidia [7]. The us government is expected to announce its decision on chip tariffs by august 1 [7]. Tsmc is investing over $100 billion in the us to mitigate these risks [7].

stock market implications and expert views

Tsmc’s advancements in packaging and its market leadership have positive implications for its stock [1]. Foreign brokerages are optimistic, with morgan stanley setting a target price of 1,288 ntd [8]. The taiwan stock exchange (twse) rose 57 points on july 12, closing at 22,751 points [8]. Foreign investors were net buyers of 170.5 billion ntd worth of shares on the same day [8]. Tsmc will hold an earnings conference on july 17, focusing on tariffs, exchange rates, and global strategy [8]. The company’s q3 revenue is projected to reach new highs, potentially exceeding $30 billion [8].

Bronnen

tsmc advanced packaging