Inside TSMC's AI-Fueled Surge: Record Revenue, A CEO's Pricing Pledge, and the CoPoS Revolution

The results underscore that the global rush to build out AI infrastructure among enterprises remains a powerful, sustained tailwind for the world's largest contract chipmaker .

CEO's Blunt Warning: 'We Can Only Produce So Much'

At the company's annual shareholders' meeting in Hsinchu on June 4, 2026, Chairman and CEO C.C. Wei delivered a sobering forecast alongside the stellar financial results. He warned that TSMC's global chip supply will not be able to meet AI-fueled demand for "a very long time," and that production capacity, not just wafer orders, is the fundamental bottleneck .

"We're working very hard, but demand is high and we can only produce so much," Wei told shareholders, confirming that advanced-node capacity is effectively sold out and that demand is running roughly 25% to 30% above what TSMC can currently produce . This structural shortage is expected to persist even as more manufacturing capacity comes online in the U.S. over the next few years .

Pricing Strategy: Discipline Over Greed

Wei drew a sharp line between TSMC's approach and the aggressive price spikes seen in the memory chip industry. He explicitly ruled out imposing the same kind of sudden, volatile price increases, framing the decision as a commitment to long-term customer relationships .

"That's not sustainable. We're focused on building trust over the long term," Wei said, distinguishing TSMC's model from spot-market-style pricing .

However, this does not mean prices are flat. When asked directly if he would like to raise prices, Wei replied, "I'd like to do that... we still need to make money," indicating that gradual price adjustments are on the table . Reports suggest TSMC is planning 5–10% price increases for its advanced process nodes in 2026, driven by inflationary pressures on materials, equipment, and manufacturing costs .

The takeaway: TSMC's pricing will rise steadily and predictably, not abruptly—a critical signal for the entire electronics supply chain.

The Next Big Leap: Inside CoPoS Packaging Technology

Beyond the immediate capacity crunch, TSMC is preparing a fundamental shift in how the most powerful AI chips are assembled. Its next-generation advanced packaging technology, called CoPoS (Chip-on-Panel-on-Substrate), is on an accelerated path to mass production in the second half of 2028, according to prominent analyst Ming-Chi Kuo and multiple industry reports .

What Is CoPoS?

CoPoS is a fan-out panel-level packaging (FOPLP) solution that represents a radical departure from the traditional 300mm circular silicon wafer that has been the industry standard for decades. Instead, it uses large, rectangular panels—typically 310mm × 310mm for the current phase—to assemble chips .

The technical architecture involves a glass core substrate with ABF (Ajinomoto Build-up Film) build-up layers on both sides. The chips themselves sit on the surface of these layers, and interconnections are handled by a Redistribution Layer (RDL) on the chip side and the ABF layers themselves . This design enables enormous, complex packages that are physically impossible with current CoWoS (Chip on Wafer on Substrate) technology.

Why It Matters for AI

The shift from circular wafers to square panels solves a critical manufacturing bottleneck for the next generation of AI accelerators. A 300mm round wafer has an area utilization rate of approximately 57%. A square 310mm × 310mm panel pushes utilization over 87%, yielding more than five times the usable area .

This has a dramatic impact on output. For a large chip such as Nvidia's B200-class GPU, a standard CoWoS substrate might yield around 4 units. The same space on a CoPoS panel can produce between 9 and 16 units, dramatically improving manufacturing economics .

CoPoS is explicitly designed for ultra-large packages exceeding 9.5 times the standard photomask (reticle) size—heterogeneous systems so large they simply cannot be built with today's tools . These are the kinds of chips required for next-decade AI models.

Target: Nvidia's Feynman AI GPU

Multiple reports, including those from Ming-Chi Kuo, point to Nvidia's next-generation Feynman AI GPU architecture as the likely debut product for CoPoS . While early rumors briefly mentioned Intel's own next-gen chips, the current consensus firmly identifies Nvidia as the lead customer .

Nvidia is expected to pair the Feynman architecture with TSMC's advanced A16 process node, set to begin mass production in the second half of 2026, for a chip launch targeted for 2028 . By securing early access to both the A16 process and the new CoPoS packaging, Nvidia is cementing a multi-year competitive moat in AI hardware .

A Global Production Timeline

The development timeline is already in motion, with parallel efforts in Taiwan and the United States:

• Pilot Line (Taiwan): TSMC's CoPoS pilot line is being established at its Longtan facility, operated by subsidiary VisEra. Tool deliveries to R&D teams began in February 2026, and the full pilot line is on track for completion by June 2026 . Trial production is expected in late 2026 to early 2027, followed by process validation in 2028 .
• Volume Production (Taiwan): Mass production at TSMC's new Chiayi facility is slated to ramp between the second half of 2028 and 2029 .
• U.S. Expansion: TSMC is planning a dedicated CoPoS packaging facility in Arizona, with pre-production targeted for the end of 2027 and volume production in 2029. This marks a strategic shift to secure the entire AI compute stack on U.S. soil .

Strategic Significance

CoPoS is not just a cost-saving measure; it is a defensive and offensive strategic weapon. It extends TSMC's overwhelming leadership in advanced packaging, with Kuo estimating the competitive advantage will remain visible through approximately 2032 . For the AI industry, it will unlock a new class of physically larger, more powerful accelerators beyond the limits of current technology, keeping Moore's Law alive in the era of massive AI models.