Analysis: AI boom shifting profit pools from GPUs to advanced packaging
- Taiwan Semiconductor Manufacturing Co., SK hynix, Micron and packaging groups including ASE and Amkor have spent the past year saying the AI constraint is no longer only GPUs; it is packaging and HBM. - TSMC reported 66.2% gross margin on $35.9 billion of first-quarter 2026 revenue, while researchers project CoWoS packaging capacity could reach 100,000 wafers a month by end-2026. - The supply chain is widening from chip design into memory, interposers and outsourced assembly-and-test, with yield and capacity now central to AI server shipments. (trendforce.com)
Advanced packaging has become one of the tightest choke points in the artificial-intelligence chip boom, alongside the high-bandwidth memory stacked next to the processor. (tsmc.com) (trendforce.com) That packaging step is where a graphics processor, memory stacks and the substrate are stitched into one module, and Taiwan Semiconductor Manufacturing Co.’s CoWoS platform is the best-known example. TSMC says CoWoS is designed for high-performance computing and can integrate large processor dies with multiple HBM stacks on one package. (tsmc.com 1) (tsmc.com 2) TSMC’s own numbers show how valuable the broader stack has become. The company reported first-quarter 2026 revenue of $35.9 billion, gross margin of 66.2% and operating margin of 58.1% on April 16. (investor.tsmc.com) Researchers at TrendForce said on January 7 that TSMC still leads Intel in advanced packaging because it combines foundry production with a turnkey packaging flow and higher yields. The firm said Intel is expanding EMIB packaging globally, but customers remain cautious because of technical and yield challenges. (trendforce.com) The memory side is tightening too. SK hynix said on April 23 that favorable pricing should continue for DRAM and NAND because AI service expansion is driving memory demand, after posting record 2025 results led by HBM. (news.skhynix.com 1) (news.skhynix.com 2) Micron has been building around the same bottleneck. The company said it is growing HBM capacity through 2026 and broke ground in Singapore on a dedicated HBM advanced-packaging facility, with operations scheduled to begin in 2026. (investors.micron.com 1) (investors.micron.com 2) That helps explain why outsourced assembly-and-test companies are getting more attention. ASE describes itself as a provider of assembly, wafer probing and final test, while Amkor calls itself one of the world’s largest outsourced semiconductor packaging and test companies. (aseglobal.com) (ir.amkor.com) Counterpoint Research said TSMC’s CoWoS capacity is projected to reach 100,000 wafers per month by the end of 2026, driven mainly by Nvidia graphics processors and custom artificial-intelligence chips. The same report said ASE benefited from strong CoWoS demand in 2025. (counterpointresearch.com) Nvidia’s financials still show where the end demand sits: fourth-quarter fiscal 2026 revenue reached $68.1 billion and data-center revenue hit $62.3 billion. But the companies deciding how fast those systems can ship now include the firms attaching memory, managing yields and testing finished packages. (nvidianews.nvidia.com) The profit pool has not left GPUs; Nvidia’s numbers are too large for that claim. What has changed is that AI server growth now depends more visibly on the less glamorous steps after the wafer, where packaging capacity, HBM supply and test throughput decide who can deliver on time. (nvidianews.nvidia.com) (trendforce.com)
