Mizuho Securities Asia has substantially raised its projections for Taiwan Semiconductor Manufacturing Co.'s monthly CoWoS packaging capacity, reflecting what the firm describes as a pronounced step-up in demand from server CPU programs tied to AI workloads. The firm now models CoWoS packaging capacity reaching 140,000 units per month in 2026 and climbing to between 190,000 and 200,000 units per month in 2027, versus its prior forecasts of 120,000 and 170,000-180,000 respectively.
Those upward revisions are accompanied by parallel increases across advanced process nodes. Mizuho expects TSMC's N3 monthly capacity to hit 170,000 units in 2026 and 200,000 in 2027. For N2, the bank projects 90,000 monthly units by 2026, 150,000 by 2027, and 200,000 by 2028. On the leading-edge A14 node, Mizuho now models production ramping to 15,000 units per month in 2027 and to 40,000 per month by 2028. Taken together, these adjustments signal that Mizuho sees TSMC's manufacturing footprint needing a faster expansion cadence to satisfy anticipated customer demand.
Kevin Wang, a Mizuho analyst, framed the revisions around server CPU demand for AI applications, citing both x86 and ARM-based architectures. "We believe server CPU demand for AI applications, including x86 and ARM-based, to grow above 50% YoY in 2027. ARM-based server CPU should be more than double in 2027, compared with 2026," Wang said. He explicitly named expected contributors to the demand profile: Nvidia Vera CPU, Intel and AMD server CPUs, and cloud service provider (CSP) chips from Google, AWS, Microsoft, and Meta.
Mizuho translated that demand view into unit-level forecasts for 2026 and 2027. NVIDIA Corporation is now modeled for 630,000 CoWoS units at TSMC in 2026, increasing to 1,005,000 units in 2027, a raise attributed to stronger Vera CPU demand in 2026-27 and higher Rubin architecture production in 2027. Broadcom's 2027 CoWoS estimate was trimmed slightly to 425,000 units from 450,000. MediaTek's CoWoS estimate was nearly doubled to 180,000 units from 93,000, a change Mizuho links to heightened Google TPU demand.
At the wafer-process level, Mizuho projects large-scale production volumes across multiple supplier programs for 2027: more than 7 million units for Nvidia Vera CPU, 5 million units for AMD Venice CPU, in excess of 4 million units for Google's CPU program, over 3 million units for AWS, about 1 million units for Microsoft, and between 100,000 and 200,000 units for Meta. These unit forecasts are presented as the granular detail underpinning Mizuho's view of capacity needs.
The capacity buildout extends beyond TSMC's own fabs into the packaging and test ecosystem. Mizuho expects ASE's monthly CoWoS capacity to reach 20,000 by 2026 and to expand to 40,000-45,000 by 2027, with much of that volume serving AMD Venice and Nvidia Vera CPU programs. Amkor is forecast to grow monthly CoWoS capacity to 20,000-25,000 by the end of 2027, covering Nvidia Vera CPU, GB10, LPU, Broadcom switch, and GUC Microsoft CPU programs. Mizuho explicitly rates ASE and ASMPT as beneficiaries of these packaging trends, assigning BUY ratings and price objectives of TWD570 for ASE and HKD280 for ASMPT.
Equipment procurement activity is also highlighted in Mizuho's note. The firm observed orders for CoW thermal compression bonding (TCB) equipment for Shibaura coming from ASE/SPIL in March and from TSMC in April. Based on that data, Mizuho expects TSMC and ASE/SPIL combined to procure more than 130 TCB units from Shibaura in 2026. In addition, TSMC is planning to place 50-80 units of flux-less TCB orders with either K&S or ASMPT in the second half of 2026 and the first half of 2027, a detail Mizuho highlights as evidence of continued equipment capital expenditure even as lead times tighten.
On the interconnect technology front, Mizuho notes that Intel's EMIB-T interconnect yield has reached more than 95%. The bank reports Intel is now engaged in customer discussions with MediaTek, Ampere Computing, AWS, and Tesla on potential adoption of the EMIB-T technology.
Mizuho carries a BUY rating on TSMC with a price objective of TWD3,000 and also assigns a BUY rating to ASML Holding NV with a price objective of EUR2,000. The firm identifies a set of forward-looking catalysts for its bullish thesis: whether Nvidia's Vera CPU and Rubin production schedules continue to execute into 2027, whether CSP silicon programs at Google and AWS accelerate further, and whether yield improvements at TSMC's N2 node sustain the planned capacity expansion into 2027 and 2028.
Market and sector implications
- Semiconductor foundry capacity and advanced packaging are the immediate beneficiaries of the revised demand profile.
- Equipment makers for advanced packaging and thermal compression bonding are likely to see accelerated orders if the demand ramps as modeled.
- Cloud providers and server CPU vendors are central to the demand story, as their silicon programs drive the need for both advanced-node wafers and CoWoS packaging.