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Taiwan Semiconductor Manufacturing Company (TSMC), the global leader in chipmaking, has adjusted its ambitious plans for expanding its Chip-on-Wafer-on-Substrate (CoWoS) technology. The company cited growing geopolitical uncertainties, particularly following Donald Trump’s re-election and escalating trade restrictions between the US and China.
Initially, TSMC aimed for an aggressive capacity increase to meet surging demand driven by artificial intelligence (AI). Its original projections targeted CoWoS production of 75,000 units per month by 2025 and 140,000 units by 2026.
However, the company has now slightly scaled back these figures, with new goals set at 75,000 and 135,000 units, reflecting a more cautious approach. While AI remains a key driver for the semiconductor industry, the revised strategy underscores how political dynamics are reshaping business decisions.
Despite this adjustment, industry leaders maintain a bullish outlook on AI-driven growth. Nvidia CEO Jensen Huang recently described demand for its advanced AI chips as “extraordinary,” with major technology firms like Microsoft and OpenAI signaling robust interest.
Similarly, TSMC CEO C.C. Wei expressed confidence in the continued rise of AI-driven chip demand, though he acknowledged the complexities posed by geopolitical challenges.
TSMC’s recalibration is expected to have wider implications across the semiconductor supply chain. Suppliers of manufacturing equipment and outsourced semiconductor assembly and testing (OSAT) services may face reduced orders as TSMC slows its capacity expansion.
Furthermore, trade restrictions continue to prevent the company from accepting orders from Chinese AI chipmakers, limiting its ability to fully capitalize on the booming AI sector.
This shift highlights the delicate balancing act for semiconductor firms navigating unprecedented demand alongside mounting political risks. TSMC’s tempered expansion plans reflect the industry’s need to adapt to an unpredictable global landscape while striving to meet the insatiable appetite for cutting-edge technology.
