On July 9, according to the latest report from UBS Investment Bank’s semiconductor analyst in Taiwan, the expansion speed of advanced semiconductor packaging CoWoS (Chip-on-Wafer-on-Substrate) was faster than expected. By the end of this year, the production capacity will reach 45,000 wafers per month, and by the end of next year, it will reach 65,000 wafers per month. By 2026, more companies will expand production, further increasing capacity by 20-30%.
UBS Taiwan semiconductor analyst Lily Lin stated that the industry’s early planning for 2026 expansion indicates an increasing visibility of demand for cloud AI accelerators. Although shipments of smartphones and personal computers (PCs) fell significantly last year, they are expected to see a slight increase this year, driven by the chip replacement cycle supporting generative artificial intelligence (AI) at the edge.
Lily Lin mentioned that market attention to Edge AI has been increasing since the second half of 2023, and chip design companies’ responses to product design will not be widely apparent until 2025.
Lin predicts that advanced packaging plants are expected to continue growing over the next 2 to 3 years. However, the silicon wafer industry will face a more challenging year ahead, with an oversupply and limited profit recovery.
Randy Abrams, head of Taiwan research at UBS Investment Bank, stated that the overall PC market demand has been corrected significantly in the past two years. Due to the low base, better growth may be seen next year. Besides the traditional x86 architecture, the ARM camp is also becoming more aggressive, and consumers have responded positively to ARM architecture PCs, citing longer battery life and better software hardware integration. The PC industry might see more competition in the next two to three years.
Abrams also analyzed that the industrial and automotive sectors are in the later stages of this technology cycle correction, and demand is slowly improving now. Geopolitical factors remain an unpredictable variable in the coming years.
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