TSMC Expected to Hold Strong Lead in Advanced Chip Packaging as AI Demand Accelerates
Taiwan Semiconductor Manufacturing Company is expected to remain in a powerful competitive position across advanced chip manufacturing and packaging, according to a recent research note from Citibank. The report suggests that TSMC is unlikely to face major pressure in its most important technology segments, particularly as demand for artificial intelligence and high-performance computing continues to rise.
A key focus is TSMC’s CoWoS advanced packaging technology, which has become essential for AI accelerators, data center processors, and other high-end chips that require extremely fast communication between components. As AI workloads grow more complex, chip designers need packaging solutions that can combine multiple processors, memory stacks, and specialized components into a single high-performance package.
Citibank’s analysis indicates that TSMC’s CoWoS capacity could expand significantly in 2026 and 2027, supported by strong demand from AI chip customers. This expansion may help the company maintain its dominant role in the supply chain, especially as leading technology firms continue to invest heavily in AI infrastructure.
Beyond CoWoS, the report also points to other TSMC packaging technologies that could drive future growth. These include SoIC, or system on integrated chips, and CoPoS, or chip-on-panel-on-substrate. Both technologies are expected to become increasingly important as semiconductor designs move toward more advanced architectures that require higher bandwidth, better power efficiency, and tighter integration.
Intel’s EMIB-T Packaging Faces Scaling Questions
Intel has been promoting its EMIB-T packaging technology as an alternative approach in the advanced packaging market. Recent industry discussions suggest that major technology companies have shown interest in EMIB-T for future AI chip designs.
Unlike traditional advanced packaging methods that often use a silicon interposer to connect chips, Intel’s EMIB technology uses an organic substrate. This approach can offer cost advantages and design flexibility. EMIB-T, a newer variation of the technology, adds through-silicon vias, or TSVs, to improve vertical power and signal delivery between the chip and the board.
Intel has stated that EMIB-T can reduce leakage compared with standard EMIB designs because the TSV structure allows current to move more directly between components. In theory, this could improve efficiency and performance in demanding applications such as AI processors.
However, Citibank’s analyst notes that the success of EMIB-T may depend heavily on the maturity and availability of ABF substrates. ABF, short for Ajinomoto Buildup Film, is a critical material used in high-end chip packaging. If ABF suppliers are unable to scale production quickly enough, EMIB-T could face limitations similar to the supply constraints currently affecting other advanced packaging technologies.
This means Intel’s packaging ambitions may not be determined by technology alone. The broader supply chain, especially ABF substrate capacity, could play a major role in how quickly EMIB-T can be adopted at scale.
TSMC’s AI Chip Position Remains Difficult to Challenge
The report also addresses another area of competition: Intel’s 18A process technology. Intel has been working to regain leadership in semiconductor manufacturing, and 18A is one of its most important upcoming process nodes.
Some market reports have suggested that major consumer electronics companies are evaluating Intel’s 18A technology. However, Citibank’s analyst cautions that early chip design activity, such as tape-out, does not necessarily mean large-scale mass production will follow.
Tape-out is a normal step in semiconductor development, where a chip design is finalized and prepared for manufacturing trials. While it can indicate customer interest, it is not a guarantee that a company will commit to high-volume production.
The research note emphasizes that many AI and high-performance computing chip designs planned for 2027 and 2028 have already been finalized. This gives TSMC an advantage because customers designing next-generation AI chips often need to lock in manufacturing and packaging decisions years ahead of commercial launch.
As a result, TSMC’s established ecosystem, proven manufacturing capabilities, and advanced packaging capacity make it difficult for competitors to quickly displace the company in the AI semiconductor market.
AI Growth Could Keep Advanced Packaging Demand Elevated
The rapid expansion of artificial intelligence is reshaping the semiconductor industry. AI chips require enormous computing power, high memory bandwidth, and efficient thermal performance. These needs have made advanced packaging just as important as traditional chip manufacturing.
For TSMC, this trend has created strong demand for CoWoS and related technologies. CoWoS is widely used for chips that combine logic processors with high-bandwidth memory, a structure commonly found in AI accelerators. As cloud providers, chip designers, and enterprise customers continue building larger AI systems, demand for this type of packaging is expected to remain strong.
The challenge for TSMC has been capacity. Demand for CoWoS has exceeded supply at various points, leading to concerns about bottlenecks in the AI hardware supply chain. Citibank’s view suggests that TSMC’s capacity expansion in the coming years could help ease these constraints while strengthening its market position.
At the same time, competitors are working to bring alternative packaging technologies to market. Intel’s EMIB-T could become a meaningful option if the supporting supply chain matures. Still, the report indicates that TSMC’s current lead, customer relationships, and technology roadmap give it a strong defensive position.
TSMC’s Roadmap Strengthens Its Long-Term Outlook
TSMC’s future growth is not expected to rely on a single packaging solution. The company is building a broader portfolio that includes CoWoS, SoIC, and CoPoS, each serving different needs in the advanced semiconductor market.
SoIC focuses on stacking chips more closely together, helping improve performance and reduce power consumption. This can be especially useful for advanced processors where physical distance between components affects speed and efficiency.
CoPoS, meanwhile, is viewed as another potential growth driver as the industry explores new ways to package increasingly large and complex chips. These technologies may become more relevant as AI models, data center workloads, and specialized computing applications continue to demand more powerful hardware.
The overall message from Citibank’s report is that TSMC remains well positioned despite rising competition. Intel is making progress with new manufacturing and packaging technologies, but scaling them into high-volume production will likely depend on supply chain readiness, customer adoption, and execution over multiple years.
For now, TSMC appears set to retain a leading role in advanced chip packaging, especially in AI and high-performance computing. With demand expected to grow through 2026 and 2027, the company’s ability to expand CoWoS capacity and develop next-generation packaging technologies could keep it at the center of the global semiconductor race.
