Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is preparing to increase prices for its advanced semiconductor packaging services by as much as 20%, according to a Tuesday report from the Commercial Times citing industry sources.
The reported increases come as demand for artificial intelligence processors places additional pressure on semiconductor packaging and testing capacity.
According to the newspaper, semiconductor foundries and outsourced assembly and testing providers are preparing price increases ranging from 10% to 20% for chip-on-wafer-on-substrate (CoWoS) packaging, a technology used in advanced AI processors.
The report also highlighted longer equipment delivery times and expectations for continued expansion of TSMC’s CoWoS production capacity through 2027.
Advanced Semiconductor Packaging Prices Could Rise 10% to 20%
The Commercial Times reported that semiconductor manufacturers and outsourced semiconductor assembly and test providers are considering price adjustments for CoWoS packaging services.
Industry sources cited by the newspaper indicated that increases could range between 10% and 20%, reflecting demand for advanced packaging capacity.
CoWoS technology is used in the production of advanced AI processors, making packaging availability an important component of semiconductor manufacturing schedules.
The reported price adjustments have not been presented as a confirmed pricing announcement from TSMC.
AI Processor Demand Expands Beyond Graphics Processing Units
Demand for advanced packaging services is extending beyond graphics processing units, according to the report.
The newspaper identified server central processing units and custom application-specific integrated circuits as additional sources of demand for CoWoS packaging.
These developments are increasing the range of semiconductor products competing for advanced packaging capacity.
The report also noted that AI processors require longer testing periods, adding to the workload of semiconductor packaging and testing providers.
The combination of additional chip categories and extended testing requirements is contributing to capacity constraints across the industry.
Semiconductor Equipment Lead Times Extend to Eight Months
Equipment delivery schedules have also lengthened as manufacturers seek to expand advanced packaging production.
According to the Commercial Times, equipment lead times have increased to between six and eight months, compared with approximately three to six months previously.
The longer delivery periods reflect difficulties in expanding production capacity quickly enough to meet demand.
The report indicated that chip manufacturers are prioritizing delivery schedules while equipment suppliers work to increase their ability to fulfill orders.
These conditions could affect the timing of planned capacity additions across the semiconductor packaging supply chain.
TSMC CoWoS Capacity Projected to Reach 200,000 Wafers Monthly in 2027
TSMC is expected to continue expanding its CoWoS packaging capacity over the next two years.
According to analyst estimates cited by the Commercial Times, the company’s monthly CoWoS capacity could exceed 130,000 wafers in 2026.
The same estimates project that monthly capacity could reach 200,000 wafers in 2027.
These figures represent analyst projections rather than confirmed production results.
The anticipated expansion reflects expectations for additional advanced packaging requirements as AI processor demand extends across multiple semiconductor categories.
Advanced Packaging Costs Remain in Focus Across Semiconductor Industry
The reported pricing plans illustrate the relationship between demand for AI computing hardware and the availability of semiconductor manufacturing services.
Higher requirements for CoWoS packaging, longer testing times and extended equipment delivery schedules are among the factors identified in the Commercial Times report.
At the same time, analyst estimates suggest that TSMC’s monthly CoWoS capacity could increase substantially between 2026 and 2027.
The potential 10% to 20% price increases remain based on industry sources cited by the newspaper, while the projected capacity figures depend on future expansion plans being achieved.