[News] TSMC Reportedly Slows Down CoWoS Capacity Expansion for 2026

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According to a report by Money DJ, TSMC, the global leader in semiconductor foundry, has recently notified domestic and international equipment suppliers to temporarily halt plans for equipment demand and deliveries scheduled for 2026, pending further updates.

Industry sources cited by Money DJ indicated that while the AI trend remains robust, the decision reflects cautious consideration of potential policy uncertainties following former President Donald Trump’s return to power. TSMC is reportedly taking a “wait and see” approach to reassess future demand and expand capacity prudently in response to shifting geopolitical conditions. The report noted that TSMC does not comment on market rumors.

Amid the booming AI business, TSMC has been aggressively expanding its CoWoS (Chip-on-Wafer-on-Substrate) capacity. Production targets for 2024–2025 are set to more than double consecutively, yet demand continues to outpace supply.

The report highlights TSMC’s construction progress, Including its newly acquired facility from Innolux’s Tainan Fab 4, which is expected to complete construction by March–April 2025. Equipment installation is slated for the second half of 2025, with production contributions beginning later that year. TSMC is also reportedly negotiating to acquire a second facility from Innolux. Meanwhile, its Chiayi fab is targeting equipment delivery by the end of 2025 and installation in early 2026, focusing on SoIC (System-on-Integrated-Chips) expansion, with production potentially starting by late 2026.

Money DJ further notes that initial market expectations for sustained capacity expansion through 2026 have shifted. Earlier this year, TSMC had informed suppliers of significant equipment orders for 2026, with deliveries for 2025 already fully booked and plans underway for 2026. However, recent developments suggest a slowdown.

Sources cited by Money DJ reveal that while construction timelines for Innolux’s old fab remain on schedule, equipment deliveries have been delayed by 2–3 months. Additionally, progress on acquiring a second facility has been hindered by unresolved differences. Multiple equipment suppliers have confirmed receiving notices from TSMC to temporarily pause 2026-related planning, awaiting further updates.

(Photo credit: TSMC)