Mizuho Raises TSMC CoWoS Capacity Forecast

Mizuho Raises TSMC CoWoS Capacity Forecast

Mizuho Securities Asia has upgraded its outlook for Taiwan Semiconductor Manufacturing Co (TSMC), increasing the projected monthly CoWoS (chip‑on‑wafer‑on‑substrate) packaging capacity to 140,000 units for 2026 and to a range of 190,000‑200,000 units for 2027, up from its earlier estimates of 120,000 units in 2026 and 170,000‑180,000 units in 2027. The analyst team attributes the revision to a sharply upgraded view of AI‑driven server CPU demand, which they expect to grow above 50% year‑on‑year in 2027, with ARM‑based server CPUs more than doubling versus 2026.

The capacity lift is accompanied by a substantial increase in customer‑specific forecasts. Mizuho now projects that NVIDIA Corporation will consume 630,000 CoWoS units in 2026, rising to 1,005,000 units in 2027, driven by the ramp‑up of NVIDIA’s Vera CPU and the Rubin architecture. MediaTek’s forecast has been nearly doubled to 180,000 units in 2027 from 93,000 units previously, reflecting stronger demand for Google’s TPU. Broadcom Inc’s estimate for 2027 has been trimmed slightly to 425,000 units from 450,000 units.

On the advanced‑node side, Mizuho expects TSMC’s N3 monthly capacity to reach 170,000 units by 2026 and 200,000 units by 2027. N2 capacity is projected at 90,000 units in 2026, 150,000 units in 2027, and 200,000 units in 2028. The A14 node is expected to achieve 15,000 units per month by 2027 and 40,000 units per month by 2028, indicating that the most advanced silicon generations will be in meaningful production well before the decade’s end.

Server‑CPU production forecasts are detailed: NVIDIA’s Vera CPU is expected to exceed 7 million units in 2027; AMD’s Venice CPU is projected at 5 million units; Google’s CPU at more than 4 million units; AWS’s CPU at more than 3 million units; Microsoft’s CPU at roughly 1 million units; and Meta’s CPU between 100,000 and 200,000 units.

The packaging capacity expansion extends beyond TSMC. ASE’s monthly CoWoS capacity is forecast to reach 20,000 units by 2026 and 40,000‑45,000 units by 2027, primarily serving AMD Venice and NVIDIA Vera CPU programs. Amkor’s monthly CoWoS capacity is expected to grow to 20,000‑25,000 units by the end of 2027, covering NVIDIA Vera CPU, GB10, LPU, Broadcom switch, and GUC Microsoft CPU.

Equipment procurement is also accelerating. Mizuho observed CoW thermal compression bonding (TCB) orders from ASE/SPIL in March and from TSMC in April, and expects the two firms combined to purchase more than 130 TCB units from Shibaura in 2026. Additionally, TSMC plans to place 50‑80 flux‑less TCB orders with either K&S or ASMPT in the second half of 2026 and the first half of 2027, underscoring continued equipment capex despite tightening lead times.

On the Intel front, Mizuho notes that the EMIB‑T interconnect yield rate has surpassed 95%, and Intel is now in customer conversations with MediaTek, Ampere Computing, AWS, and Tesla regarding adoption of the technology.

Mizuho maintains a BUY rating on TSMC with a price objective of TWD 3,000 and a BUY rating on ASML Holding NV with a price objective of EUR 2,000. The firm also rates ASE (BUY; price objective TWD 570) and ASMPT (BUY; price objective HKD 280) as beneficiaries of the packaging trends.

Key forward catalysts highlighted include the successful ramp‑up of NVIDIA’s Vera CPU and Rubin production schedule into 2027, acceleration of CSP silicon programs at Google and AWS, and sustained yield improvements on TSMC’s N2 node that would support the capacity expansion timeline through 2028.