Morgan Stanley Forecasts 93% CoWoS Demand Surge by 2027, Driven by AMD’s Venice CPU Shipments

July 19, 2026

KuCoin International

Overview

Morgan Stanley forecasts global CoWoS (Chip-on-Wafer-on-Substrate) demand to nearly double to 2.694 million wafers in 2027, a 93% increase from 1.394 million in 2026. This growth is predominantly driven by AMD’s Venice CPU shipments, with AMD’s CoWoS demand projected for a staggering 308% growth rate. This signifies CoWoS applications are expanding beyond AI accelerators to server CPUs, making advanced packaging capacity a crucial competitive factor.

In Depth

Key Findings

A recent research report by Morgan Stanley predicts a dramatic increase in global CoWoS (Chip-on-Wafer-on-Substrate) demand, projecting a nearly 93% growth by 2027 compared to 2026. Specifically, demand is expected to reach 2.694 million wafers in 2027, with AMD’s Venice CPU shipments identified as the primary catalyst for this surge.

Technical and Clinical Details

CoWoS is an advanced 2.5D/3D packaging technology designed to integrate GPUs, HBM (High Bandwidth Memory), and chiplets. This technology is critical for achieving high bandwidth and low latency, essential for enhancing the performance of AI accelerators and High-Performance Computing (HPC) applications. While NVIDIA remains the largest consumer of CoWoS, Morgan Stanley’s report highlights AMD’s emergence with an impressive 308% growth rate, driven largely by its Venice CPU shipments. This indicates that high-performance server CPUs are leveraging CoWoS to directly handle AI workloads, expanding CoWoS technology’s application beyond dedicated AI accelerators into broader data center infrastructure.

Background and Industry Context

The evolution of AI and data science demands unprecedented computational power and data processing speeds, dramatically elevating the importance of semiconductor packaging technologies. Traditional 2D packaging faced challenges like longer data transmission distances, signal delays, and increased power consumption between chips. CoWoS overcomes these limitations by horizontally connecting multiple chips via a silicon interposer and vertically stacking HBM. However, CoWoS manufacturing requires sophisticated technology and substantial capital investment, making its supply capacity a bottleneck that restricts the overall supply of AI chips. Against this backdrop, foundries and OSAT (Outsourced Semiconductor Assembly and Test) providers are intensely focused on expanding CoWoS capacity, making its availability a decisive competitive factor among semiconductor manufacturers.

Strategic Significance and Outlook

The rapid expansion of CoWoS demand will further accelerate capital investment across the semiconductor industry, particularly in advanced packaging. AMD’s increased adoption of CoWoS in the server CPU market creates a new, significant demand source alongside NVIDIA, fostering market diversification. This intensification of competition for CoWoS supply will compel TSMC and its OSAT partners to further boost production and innovation. In the coming years, securing CoWoS capacity will be a critical metric determining success for companies in the AI chip market, significantly impacting the entire infrastructure supporting AI’s evolution.

Source: https://www.kucoin.com/news/flash/morgan-stanley-report-cowos-demand-to-double-by-2027-amd-and-asics-drive-ai-chip-growth

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