TSMC breaks ground on Phase II Chiayi advanced packaging plants; CoWoS capacity to grow 80%+ through 2027

TSMC announced Phase II expansion of its Chiayi Science Park advanced packaging cluster on July 13, with two new CoWoS (chip-on-wafer-on-substrate) facilities to join the two Phase I plants already in mass production. Phase II will add a third and fourth facility to the site, with the park eventually expected to generate over NT$300 billion (~$9.35 billion) in annual output and create roughly 9,000 jobs once all four plants are operational.

TSMC is allocating up to 20% of its planned 2026 capex ($52–56 billion) to advanced packaging as CoWoS capacity shortage becomes the gating factor for AI chip delivery. The company projects 80%+ annual growth in CoWoS and SoIC packaging capacity through 2027 to meet insatiable demand from NVIDIA, Google, and other accelerator makers. June 2026 reported yields on the newest 5.5-reticle-size CoWoS exceeding 98%, with larger 14-reticle architectures planned for 2028.

The expansion underscores how advanced packaging—not wafer fab alone—has become the critical constraint in AI chip supply. For architects: CoWoS remains a multi-year lead-time item; early design wins with TSMC are prerequisites for 2027–28 accelerator launches. Chiayi Phase II completion timeline not yet disclosed by TSMC itself, only via government announcements.