TSMC signs seven-year deal with Xintec to expand CoWoS packaging

TSMC has signed a seven-year agreement with Xintec Inc. to build and run a production line for its CoWoS advanced packaging technology in Taiwan.

The deal extends through December 31, 2033. Xintec’s board approved it on November 13, 2026.

What the Xintec deal actually covers

The agreement is a capacity outsourcing arrangement. Xintec will construct and operate a line dedicated to the on-substrate portion of CoWoS, usually shortened to oS.

The line will sit inside TSMC’s facility in the Central Taiwan Science Park. TSMC supplies the building, and Xintec supplies the equipment and the people running it.

Initial mass production is targeted for 2029.

To pay for the buildout, Xintec plans to raise NT$15 billion through convertible bonds. The money is earmarked for the equipment and systems the new line will need.

Why CoWoS matters so much

CoWoS, short for Chip-on-Wafer-on-Substrate, places logic dies and high-bandwidth memory, or HBM, on a silicon interposer. That interposer acts as a dense layer of wiring linking everything up.

CoWoS has become TSMC’s flagship technology for AI and high-performance computing chips. It has also become one of the industry’s most persistent chokepoints, with TSMC repeatedly expanding capacity to keep up with demand.

Major customers such as Nvidia and AMD rely on this kind of packaging for their AI hardware.

Who Xintec is

Xintec is not a random contractor plucked from a vendor list. TSMC owns approximately 41% of the company.

Xintec derives over 70% of its revenue from TSMC-related work.

The company has been growing strongly in testing and related services for TSMC. This deal pushes it further into back-end packaging, a step up from its existing role in the supply chain.

Part of a wider capacity push

The Xintec agreement is one piece of a broader effort by TSMC to widen the CoWoS pipeline from several directions at once.

TSMC has also announced a $2 billion deal with GlobalFoundries to produce silicon interposers in the US. The ramp-up for that US-based production is targeted for 2028.

Separately, TSMC has acquired display plants from AUO. The goal there is more cleanroom space, the ultra-clean manufacturing environment that chip production requires.

Supply constraints for CoWoS are projected to ease gradually through 2028. The Xintec line, with production targeted for 2029, suggests TSMC expects demand to stay strong well beyond that point.

What this means

The most telling detail is the length of the contract. A deal running into the end of 2033 is not a short-term patch for a temporary crunch.

For Xintec, the upside is obvious. It gains a long-duration anchor contract and a bigger role in one of the most strategically valuable corners of the chip industry.

The flip side is concentration risk. A company already drawing more than 70% of its revenue from TSMC-related work is now tying itself even more closely to a single customer, and taking on bond financing to do it.

The 2029 target means this line will not relieve near-term tightness, so the GlobalFoundries ramp and the AUO cleanroom expansion will carry more of that load in the meantime.

Investors watching TSMC and its supply chain will want to track a few milestones. Those include Xintec’s progress on raising the NT$15 billion, construction updates from the Central Taiwan Science Park site, and whether the 2028 GlobalFoundries ramp lands on schedule.

TSMC is adding CoWoS-related capacity both at home in Taiwan and in the US, spreading a critical bottleneck across more than one location.