U.S. demand for CoWoS drives TSMC’s packaging expansion

December 9, 2025 /SemiMedia/ — TSMC is moving to expand its U.S. footprint in advanced packaging as demand for CoWoS and similar technologies continues to rise among American AI chipmakers. People familiar with the matter say the company is preparing to convert part of its Arizona wafer-fab site into an advanced packaging facility, responding to a supply gap that has increasingly pressured major customers.

The surge in orders comes as GPU and AI ASIC suppliers rely more heavily on high-density packaging to improve compute performance. Companies such as Nvidia and AMD have shifted more front-end manufacturing to the United States, but the lack of local packaging capacity has forced some customers to ship U.S.-fabricated wafers back to Taiwan for assembly, adding cost and logistical complexity.

TSMC accelerates Arizona buildout to address supply constraints

TSMC has historically outsourced most U.S. packaging work to partners including Amkor. But with CoWoS output constrained globally, this model has reached its limits. The company is now accelerating equipment imports and layout adjustments in Arizona, and the new site is expected to be operational by late 2027.

Rising competition as customers evaluate Intel’s packaging technologies

The shortage has opened a window for competitors. Microsoft, Qualcomm, Apple and Tesla are evaluating Intel’s EMIB and Foveros packaging technologies as alternatives to TSMC’s solutions, according to industry sources. This shift in customer behavior has added urgency to TSMC’s U.S. buildout.

Progress in Arizona is drawing strong attention across the semiconductor sector, as the plant is expected to support a meaningful share of U.S. demand for advanced packaging once it comes online.