According to reports, Taiwan Semiconductor Manufacturing (TSM) is planning to raise prices for its CoWoS packaging services. Wedbush believes this news signals that the technology is once again becoming a "bottleneck link" in the supply chain.
Wedbush analyst Matt Bryson wrote in a note to clients: "While we have not been able to independently verify the reported price increase, if true, we believe this news indicates that CoWoS is likely to become a supply chain bottleneck once again (for some time now, pressure on packaging capacity appeared to be lower than in other component supply areas)."
The report states that as the world's largest semiconductor foundry, Taiwan Semiconductor Manufacturing may raise chip-on-wafer-on-substrate prices by 10% to 20%. Taiwan Semiconductor Manufacturing manufactures chips for companies including Apple (AAPL), Nvidia (NVDA), and AMD (AMD). Taiwan Semiconductor Manufacturing did not immediately respond to requests for comment.
Bryson further analyzed that if Taiwan Semiconductor Manufacturing does raise CoWoS prices, it could also mean the company is "feeling less pressure from Intel (INTC)'s EMIB-T technology."
Bryson added: "Overall, given Taiwan Semiconductor Manufacturing's evident pricing power, strong end-customer demand, and other factors, we view this news as another positive signal for Taiwan Semiconductor Manufacturing. For Intel, the impact may be more complex, depending on the specific motivations behind Taiwan Semiconductor Manufacturing's decision to raise CoWoS prices."
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