Mizuho Raises TSMC CoWoS Capacity Forecast on AI Server CPU Demand

Mizuho Securities Asia raised its forecast for TSMC's monthly CoWoS packaging capacity to 140,000 units by 2026 and 190,000–200,000 units by 2027, up from prior estimates of 120,000 and 170,000–180,000 respectively. The revision comes as a sharply upgraded outlook for AI-driven server CPU demand forces a broad revision to the firm's semiconductor supply model.

Recommendation Change

Previously, Mizuho estimated 120,000 units per month in 2026 and 170,000–180,000 units in 2027. The new estimates represent a 16.7% increase for 2026 and an 11.8% increase for 2027.

Analyst Rationale

Mizuho analysts believe demand for AI servers is accelerating beyond prior expectations, necessitating increased advanced packaging capacity from TSMC. CoWoS (Chip-on-Wafer-on-Substrate) technology is primarily used to assemble high-performance AI processors, such as GPUs from NVIDIA and AMD.

Context

TSMC is the world's leading provider of CoWoS technology and is investing heavily to expand its capacity to meet growing demand from AI clients. TSMC has not yet issued official guidance for CoWoS capacity in 2026 and 2027.

What to Make of It

Mizuho's optimistic forecast reflects continued momentum in AI infrastructure investment, boosting demand for advanced packaging solutions. Companies like NVIDIA and AMD may benefit from increased CoWoS capacity to meet demand for their products.