TSMC Shifts 12-Inch Capacity to CoWoS Interposers as 8-Inch Foundry Tightness Drives Price Hikes
TrendForce's 5 October foundry bulletin reports eight-inch capacity tightness pushing Taiwan foundries to raise prices, with TSMC delaying mature-node retirement and reallocating twelve-inch capacity to CoWoS-related interposers and silicon photonics, while JEDEC published the first industry-wide silicon photonics reliability standard.
Eight-inch foundry capacity has become the binding constraint in the current upcycle and is the basis for a fresh round of price increases at Taiwan's mature-node specialists. TrendForce's 5 October foundry bulletin reports that UMC's eight-inch fine-linewidth lines are running close to full loading, giving it a clear basis for increases, although twelve-inch and major-customer negotiations are not yet settled. Vanguard International Semiconductor has already signalled price rises to every customer, with larger increases for those holding weaker negotiating positions, and is prioritising capacity for AI power applications, which will leave Qualcomm with a smaller allocation than last year.
TSMC's response has been to extend the life of capacity it had been winding down. The bulletin notes that TSMC has pushed back the retirement schedule for mature processes and is redirecting twelve-inch capacity toward CoWoS-related interposers and silicon photonics PICs, while continuing to expand its advanced packaging plant in Chiayi. The shift reflects a market in which the constraint has moved from wafer starts to advanced packaging, where interposer supply now gates how much accelerator volume can ship.
Power Semiconductor Manufacturing Co is taking a licensing route rather than building in-house, negotiating silicon photonics PIC technology authorisation to accelerate its roadmap. PSMC is prioritising capacity for emerging applications while retaining a small amount of high-voltage capacity for overseas supply requirements. The bulletin also flags a change in Qualcomm's demand pattern and foundry partnerships for 2027, with its stance toward MPS turning more positive as AI power becomes the growth segment.
Standardisation is catching up with the technology shift. In early October JEDEC published JESD264, the first industry-wide qualification and reliability standard for silicon photonics devices, setting requirements across four key areas as Intel, TSMC and Samsung accelerate their silicon photonics programmes. Separately, Qualcomm, Apple and MediaTek all unveiled TSMC-built 2nm processors in September 2026, marking the industry's move to gate-all-around nanosheet transistors and concentrating flagship mobile demand on the newest node.