Morgan Stanley assesses the pulse of CoWoS in 2025: strong demand still present. GB300A will take over the capacity released by MI325 and TPU for CoWoS-S.

a major Wall Street bank, Morgan Stanley, has stated that many institutional investors have been inquiring about whether Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is indeed shifting its production capacity from CoWoS-S (silicon interposer) to CoWoS-L (multiple local silicon interconnects), and what this may mean for the overall Al GPU demand globally, including for companies like NVIDIA Corporation. According to a research report released by Morgan Stanley, based on their latest supply chain survey, it has been found that the actual demand for 2.5D/3D advanced packaging is not as strong as expected. Some of the core customers of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for AI chips, such as AMD (AMD.US) and Broadcom Inc. (AVGO.US), are releasing their new MI325 and the latest AI ASIC created in collaboration with Alphabet Inc. Class C, respectively, thus freeing up CoWoS-S capacity (estimated between 10,000 to 20,000 units) . Morgan Stanley's supply chain investigation shows that NVIDIA Corporation has decided to take up this newly released CoWoS-S capacity and has requested Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to convert it into CoWoS-L for the upcoming production of the Blackwell Ultra architecture GB300A (single AI GPU version). Based on industry chain and performance investigation data from Morgan Stanley, NVIDIA Corporation's AI GPU performance using CoWoS-L advanced packaging technology is superior. The analysis team at Morgan Stanley emphasizes that demand for CoWoS series advanced packaging remains strong. They reaffirm their "overweight" rating for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stock, with a 12-month target price of up to 1388 New Taiwan Dollars, compared to the latest closing price of 1065 New Taiwan Dollars. Morgan Stanley states that the significant AI chip manufacturing demand from NVIDIA Corporation remains intact. Although there has been no fluctuation in current demand outlook for CoWoS advanced packaging from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Morgan Stanley's research suggests that demand and production capacity for the GB300A chip based on the Blackwell Ultra architecture by NVIDIA Corporation is expected to increase in the latter half of 2025. Overall, the analysis team at Morgan Stanley indicates that global tech giants' capital expenditures on cloud AI will remain strong in 2025. However, driven by strong general performance and the CUDA ecosystem, there will be a larger shift towards NVIDIA Corporation's AI GPU procurement. This shift will also see a significant transition of orders towards AMD AI GPU and major chipmakers like Broadcom Inc. in producing AI ASICs. This aligns with Morgan Stanley's views in the ASIC 2.0 Insight Report, stating that this year, NVIDIA Corporation's AI GPU series products (including H100/H200, as well as the Blackwell+Blackwell Ultra architecture series) will gradually eat into market share from AMD AI GPU and Alphabet Inc. Class CTPU. Therefore, the analysts at Morgan Stanley emphasize in this latest research report that they are bullish on the future stock price trends of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and NVIDIA Corporation, reaffirming an "overweight" rating. At the same time, they hold a cautious "hold" stance on the stock price trends of AMD, NVIDIA Corporation's biggest competitor in the PC and data center AI chip sectors. Nevertheless, Morgan Stanley believes that the stock price of AMD is poised to rise by over 30%. Their 12-month target price for AMD is $158, based on an estimated earnings per share of $5.64 for 2026 and a valuation of approximately 28x. This reflects the expectation that AMD will further expand its PC market share at the expense of Intel Corporation and see a year-over-year growth of 18% in their data center business, with a potential 20% growth in the AI-related GPU business.Sponsored ADR performance is about to be released, the market is focusing on CoWoS advanced packaging demand and capacity.The chip manufacturing giant Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, known as the "King of Chip Outsourcing", recently reached a historic high of $222 in the US stock market, thanks to the continued explosive demand for Blackwell architecture AI GPUs and the expanding demand for the most powerful competitor in AI GPUs - AI ASIC. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is set to announce its fourth quarter performance this Thursday. According to LSEG SmartEstimate survey, analysts expect Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's Q4 net profit to reach NT$377.95 billion (approximately $11.41 billion), a 58% increase year-on-year. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR reported a 39% increase in fourth quarter revenue last week, reaching NT$868.5 billion (approximately $26.3 billion); surpassing Wall Street analysts' average expectation of NT$854.7 billion. The prospect of rising prices for advanced chip packaging such as CoWoS is also a key catalyst for the recent significant rebound in Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's stock price. According to media reports, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to significantly increase prices for advanced packaging services like CoWoS by around 15% to 20%. During the upcoming earnings conference call, the market will focus on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's latest outlook on the expansion of CoWoS advanced packaging capacity and demand, which could provide insight into the future 12-18 month outlook for AI chip demand. Analysts also expect Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to disclose the extent of price adjustments for CoWoS and advanced process chip manufacturing below 5nm. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is currently the world's largest contract chip manufacturer, benefiting from the ongoing global AI frenzy and continued enthusiasm for AI. Its customers such as NVIDIA Corporation, AMD, Broadcom Inc., and other chip giants have benefited from the surge in demand for AI, the core infrastructure for AI chips. The increased scale of chip manufacturing contracts by these chip giants has driven Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's strong performance expansion beyond expectations since last year, supporting the logic behind the continued emergence of record high stock prices for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in the Taiwan stock market and US ADR market since last year. For a long time, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has been the sole chip manufacturer for Fabless chip design companies such as Apple Inc., NVIDIA Corporation, AMD, and Broadcom Inc., especially for data center server-side AI chips manufactured for NVIDIA Corporation and AMD, as well as AI ASIC chips tailored for Alphabet Inc. Class C, Microsoft Corporation, and Amazon.com, Inc. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is considered the critical core hardware infrastructure driving large artificial intelligence training/inference systems behind generative AI tools like ChatGPT and Sora. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR currently dominates almost all high-end 5nm and below process chip packaging orders in the market with its leading 2.5D and 3D chiplet advanced packaging, but its advanced packaging capacity is far from meeting demand. The shortage of NVIDIA Corporation's H100/H200 and the high demand for Blackwell production capacity is largely attributed to the limited CoWoS packaging capacity at the 2.5D level of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Currently, chip giants like Apple Inc. and AMD are turning to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR for their advanced packaging needs.The advanced packaging capacity of 3D level may further drive the demand for advanced packaging capacity of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Based on advanced packaging technology, more GPUs or other types of chips can be integrated to meet the increasing demand for computational power on a larger scale. AI tasks involve massive parallel computing, and GPUs excel in parallel computing. Advanced packaging technology can enable more GPU modules, as well as CPU, HBM, and other modules, to work together in the same chip system to provide greater parallel computing capability.Traduz em ingls: