JPMorgan has maintained its "Overweight" rating on Taiwan Semiconductor Manufacturing (TSM.US) with a target price of NT$1,275. The investment bank noted that Taiwan Semiconductor Manufacturing's CoWoS capacity is projected to reach 95,000 wafers per month (12-inch wafer equivalent) by the end of 2026, further climbing to 112,000 wafers per month by the end of 2027, representing a significant increase from previous expectations.

JPMorgan pointed out that this expansion is primarily driven by the scheduled capacity construction at the AP8 facility (expected to begin production in mid-2026) and sustained demand growth from key clients including NVIDIA, Broadcom, and AMD. Notably, starting from the second half of 2026, full-stack CoWoS packaging orders for non-AI products (such as Venice CPU and Vera CPU) will begin transferring to OSAT partners (primarily ASE Group), signaling that Taiwan Semiconductor Manufacturing will focus more on Chip-on-Wafer (CoW) capacity allocation while the on-Substrate (oS) segment will continue to be handled by ASE Group.

**Broadcom Emerges as Fastest-Growing Client**

Broadcom's 2026 CoWoS allocation is expected to reach 185,000 wafers, representing a 93% year-over-year increase, primarily driven by demand from Google's TPU projects. JPMorgan anticipates TPU shipments will reach 2.5 million units in 2026 (up 38% year-over-year), while Meta's first CoWoS-based ASIC (Athena) and OpenAI's ASIC projects will also contribute significantly to incremental demand. Considering Broadcom's internal networking chip requirements, actual demand could exceed 200,000 wafers.

**NVIDIA Demand Exceeds Expectations**

Due to increased Rubin chip sizes and strong B300 demand, NVIDIA's Blackwell series demand will remain resilient in the first half of 2026. Rubin GPU production is projected at approximately 2.9 million units in 2026, and due to increased packaging sizes (reducing chips per CoWoS wafer to 9 units), this will drive CoWoS demand growth in the second half. NVIDIA's total AI GPU production in 2026 is expected to reach 6.3 million units, though CoWoS-based chip exports to China will remain restricted.

**AMD's Growth Momentum Shift**

AMD's CoWoS demand will remain stable in 2025 but is expected to grow in 2026 with the ramp-up of MI400/MI450 series and Venice CPU (featuring HBM and CoWoS-S packaging). MI350 demand trends remain healthy, but the adoption progress of MI400/450 (using CoWoS-L) remains a key variable. Additionally, AMD will expand the application of 2.5D/wafer-level fan-out packaging in gaming GPUs and high-end server/PC CPUs in 2026/27.