TSMC’s $2 Billion Silicon Interposer Order Given to GlobalFoundries, Key CoWoS Components to be Produced in the U.S. for the First Time

TSMC is outsourcing its key component for AI advanced packaging, the CoWoS silicon interposer, to a US foundry for the first time—GlobalFoundries—with a $2 billion, five-year long-term contract. This deal extends the production capacity for this critical part of the AI chip packaging supply chain from local Taiwanese suppliers to domestic US production.

According to an agreement recently announced by TSMC and GlobalFoundries, TSMC will entrust GlobalFoundries to produce the silicon interposer required for CoWoS in New York State. This production is expected to ramp up gradually starting in the first half of 2028, with the agreement spanning five years and valued at up to $2 billion (nearly NT$64 billion).

Institutions believe that this long-term contract signals a robust demand for silicon interposers driven by AI-powered advanced packaging. To ensure sufficient silicon interposer capacity, TSMC is expanding its outsourcing orders; locking in a long-term supply contract for silicon interposers reflects bullish expectations for the market and highlights the steady growth in demand for these key components in AI packaging.

Taiwan's two leading mature process foundries, UMC and PSMC, are actively expanding their layout in silicon interposers and accelerating capacity expansion. With TSMC awarding its largest outsourcing order to an American foundry, a new domestic US production source is now added beyond Taiwanese capacity for silicon interposers.

A $2 Billion Long-Term Contract: Silicon Interposers Move to New York State

The silicon interposer serves as a critical bridge connecting AI processors and high-bandwidth memory (HBM), enabling high-speed data transfer between different chips within the same package through high-density routing. As AI chips integrate more memory and computing units, both packaging area and interconnection needs rise in tandem, driving demand for interposer technology and capacity.

TSMC’s choice to have GlobalFoundries manufacture silicon interposers in New York State extends its strategy of expanding advanced packaging capacity and outsourcing. TSMC’s CoWoS capacity has doubled for three consecutive years, and CoW processes within CoWoS have already been outsourced to packaging and testing houses like ASE Holdings to alleviate pressure from surging AI chip demand. Now, by outsourcing the silicon interposer—a critical stage—TSMC further extends its capacity reach to the US market.

Outsourcing Motivation: Securing Capacity with a Five-Year Locked-In Supply Contract

Institutions believe this move reveals surging demand for silicon interposers driven by AI-powered advanced packaging, with TSMC expanding its outsourcing to ensure sufficient capacity.

Market analysts further point out that the long-term silicon interposer supply contract between TSMC and GlobalFoundries demonstrates a positive outlook for future demand, highlighting that the need for critical AI packaging components keeps growing. The five-year duration offers both parties stable capacity and predictable orders:

For GlobalFoundries, it's a landmark order marking its New York State capacity’s entry into the AI advanced packaging materials field; for TSMC, it adds another layer of long-term security for silicon interposer supply beyond its own capacity expansion.

UMC and PSMC: Expansion Heating Up, Increased Volume Faces US Competition

UMC has long been involved in silicon interposers and is actively expanding, aiming to double monthly capacity from 3,000 to 6,000 wafers to meet client demand for advanced packaging. Its technology covers silicon interposers, deep trench capacitors, wafer-level hybrid bonding, and active interposers. Among these, its 2.5D packaging solution with deep trench capacitor integration has already been shipped to major clients, and it is validating active interposers with several customers.

PSMC is focusing on "3D AI wafer foundry" as its transformation priority, leveraging its strengths in memory manufacturing and mature nodes into silicon interposers, silicon capacitors, and wafer stacking. This year, it has already showcased interposer, integrated passive silicon capacitor, and 3D WoW DRAM stacking technologies, and plans to use existing resources (such as its P3 fab) to expand its interposer production footprint.

Both Taiwanese firms are racing to tap into the silicon interposer opportunity, betting on continued growth in AI packaging demand. However, with TSMC committing the $2 billion, five-year order to GlobalFoundries, this market segment will see American production capacity participating over the next five years; for UMC and PSMC, which are both in expansion mode, competition for silicon interposer orders will no longer be limited to Taiwanese players.

TSMC will hold its Q3 earnings call on October 15, where further details on advanced packaging capacity planning and outsourcing strategy are expected to be market focal points.