Ming-Chi Kuo: TSMC's CoWoS expansion plan remains unchanged, three possible reasons have been misreported

Taiwan Semiconductor Manufacturing Company (TSMC) (2330) has reportedly received news of order cuts for CoWoS. Tianfeng International Securities analyst Ming-Chi Kuo stated that an industry survey was conducted regarding TSMC and NVIDIA, concluding that "TSMC's CoWoS expansion plan remains unchanged" and "NVIDIA's planned CoWoS wafer production at TSMC for 2025 is approximately 370,000 wafers, with no significant changes since Q4 2024." He also analyzed three possible reasons for discrepancies between market rumors and the survey.

Market-related rumors include that TSMC's average monthly CoWoS production capacity has dropped to 62,500 wafers this year, below the previously expected 70,000 wafers, and that NVIDIA's monthly order capacity has decreased from the original expectation of around 42,000 wafers to 39,000 wafers, with Broadcom and Marvell also joining the ranks of order cuts for CoWoS.

TSMC has not responded to the related rumors; however, the testing and packaging supply chain indicated that recent CoWoS-related orders are still in high demand and have not been cut, possibly due to process and generation transitions, or even the beginning of customer layouts for next-generation fan-out panel-level packaging (FOPLP), leading to misunderstandings.

Ming-Chi Kuo conducted an industry survey on TSMC and NVIDIA and published his conclusions. He stated that TSMC's CoWoS expansion plan remains unchanged and will increase quarterly, expanding to approximately 70,000 wafers per month by December 2025. Additionally, NVIDIA's planned CoWoS wafer production at TSMC for 2025 is about 370,000 wafers (with minor fluctuations being reasonable), with no significant changes since Q4 2024.

Regarding market rumors that NVIDIA's planned CoWoS wafer production at TSMC for 2025 has been revised down from over 400,000 wafers to 380,000 wafers, Kuo analyzed three possible reasons for the discrepancies between the market rumors and his survey. He stated that one reason is that some market participants have overly optimistic expectations for NVIDIA's 2025 wafer production plan.

Another reason is that some market participants have been overly optimistic about TSMC's 2025 CoWoS wafer production, which has led to an overestimation of NVIDIA's 2025 wafer production. The final possibility is that NVIDIA's production plan changes due to the significant advancement in the transition time for the B200 and B300 series products have been misinterpreted as NVIDIA cutting CoWoS wafer production.

Kuo emphasized that his understanding is that TSMC has always been very cautious about capacity expansion. Unless there is a sharp reversal in industry trends in the short term, it is not easy to see significant order cuts, and low to mid-single-digit changes are considered reasonable. No one can accurately predict future demand.

Kuo mentioned that last year, when the AI/NVIDIA market atmosphere was at its hottest, NVIDIA had made optimistic requests, hoping that TSMC could expand CoWoS production capacity to 100,000 wafers per month, which was rejected by TSMC