According to Aletheia Capital's latest report "Riding the AI Wave," while the market has already recognized the surging demand driven by artificial intelligence, the next wave of emerging AI applications is expected to push the limits of advanced packaging capacity—a trend still largely underestimated. The report predicts that TSMC's CoWoS packaging capacity will face severe shortages over the next two years, with gaps of 400,000 wafers in 2026 and 700,000 wafers in 2027, leading to a significant supply-demand imbalance.

Aletheia highlights that this CoWoS demand boom will generate strong spillover benefits across the semiconductor ecosystem. Key Taiwan-based companies such as TSMC, ASE Technology, KYEC, Chroma ATE, MPI, and Honchun Precision are expected to emerge as major beneficiaries under this positive industry cycle, with the firm maintaining a "buy" recommendation for all six.

The report identifies two main drivers behind the CoWoS demand surge: the rapid growth in GPU shipments and the expansion of photomask sizes. Moreover, new devices including server CPUs, high-end PCs, gaming console chips, and network switches are increasingly adopting CoWoS technology, with deployment expected to accelerate significantly by 2026.

Based on the product roadmaps and packaging plans of major chipmakers, Aletheia estimates that TSMC's CoWoS shortage could reach over 20% in 2026 and expand to more than 30% in 2027, despite TSMC's plan to quadruple its CoWoS capacity between 2024 and 2027. Chips relying heavily on TSMC's CoWoS process include NVIDIA's Vera, GB10, Venice, AMD's Zen 6, Microsoft's Xbox APU, and Broadcom's Tomahawk 6 and CPX.

To ease the strain, several companies are turning to advanced packaging and testing partners for additional support. For example, NVIDIA's Vera CPUs will be packaged jointly by ASE Technology and Amkor, while AMD plans to migrate not only its AI GPUs but also server CPUs, high-end PC chips, and Xbox processors to CoWoS, driving an 8–10x surge in demand between 2025 and 2027—again relying heavily on ASE for packaging.

KYEC is also positioned for strong growth, with testing for Broadcom's AI ASICs expected to ramp up sharply from 2026 onward, particularly as the Rubin GPU requires double the usual testing time. In addition, TSMC's wafer probing outsourcing will further benefit both KYEC and MPI, as the latter's probe card solutions become the preferred choice among testing providers.