NVIDIA, being at the center of it all, is under unprecedented stress with the world semiconductor supply chain being dragged in along with it due to this new revolution in AI. According to a recent analysis performed by UBS, CoWoS demand is expected to reach mind-boggling metrics. TSMC’s advanced packaging technology is essential for NVIDIA’s high-performance AI GPUs. The estimate is for NVIDIA’s CoWoS demand to be around 678k wafers in 2026. That marks an almost 40% increase year-over-year from 2024, indicating an unquenchable AI computing power thirst with no end in sight.
This uptick is largely driven by strong orders for NVIDIA’s next-gen Blackwell architecture powered by the upcoming Rubin AI platform. Shipments of the Blackwell series, including the Blackwell Ultra variants, have seen a whopping 30% quarter-over-quarter growth. Such a production level naturally drives continued and increasing CoWoS demand at TSMC’s fabs. This advance in packaging is still needed as the company pivots more toward rack-scale solutions for large-scale AI training and inference.
The next cycle of CoWoS will be driven by NVIDIA’s Rubin family. Rubin GPUs will be packaged in CoWoS-L and slated for volume production in 2026, therefore the CoWoS demand pipeline will be full during the foreseeable future. In addition, the recently introduced Rubin CPX platform (inference-centric chip) should play a big role behind this CoWoS needs. Inference chips are deployed at large scale for running AI models, so even MORE units need TSMC’s packaging prowess. The pressure from both Blackwell and Rubin on the dual-architecture thus create a never-before-seen demand for CoWoS.
This CoWoS demand creates a downstream effect of a supply chain that simply cannot adapt. The only maker of this advanced packaging, TSMC, apparently has no time readily available to modify its capacity in line with NVIDIA’s aggressive deadlines. The large CoWoS requirement directly reflects the GPU production scale. NVIDIA is expected by UBS to go from producing a total of 4.5 million units of GPU production to 7.4 million units in 2026. Demand for CoWoS can also serve as an ideal proxy for the health of the AI industry, because each of these high-end AI GPUs depends on CoWoS packaging. The story around the AI market slowing is categorically false — actually if anything it is becoming more hysterical with CoWoS demand being the proverbial weight at the other end of the seesaw.
Finally, the expected 40% growth per year in CoWoS demand leaves no doubt about NVIDIA’s central role and dominant image as well as about the booming AI market itself. With historical CoWoS demand from Blackwell chips and upcoming CoWoS from the Rubin lineup, TSMC is tasked with scaling its advanced packaging capabilities at a breakneck pace. With the demand for CoWoS acting as the threshold to this new computational power that will power the next age of innovation, the entire tech industry is paying close attention. The CoWoS demand trend shows that the AI is not just an bandwagon, but one at a breathtaking speed.
