Two billion dollars for the layer underneath

GlobalFoundries said on Thursday that it had reached a manufacturing agreement with TSMC to make silicon interposers for TSMC's CoWoS advanced packaging at its plant in Malta, New York. The agreement is multi-year, valued at $2bn and has an initial term of five years, and provides a framework for future capacity expansion, according to the company's announcement. GlobalFoundries will expand fabrication capacity at Malta to do the work and expects to become the first US-based source of silicon interposers supporting advanced packaging technologies, including components with embedded deep trench capacitors. Volume production is expected to begin ramping in the first half of 2028.

Interposers let AI processors and memory chips communicate at high speed, Reuters explained. In TSMC's CoWoS packages the processor and its stacks of high-bandwidth memory sit side by side on the slab of silicon and are wired together through it. It is the layer that lets the memory stacked beside AI accelerators work as part of one package, and it is made on a wafer much like a chip, though a plain interposer carries wiring rather than transistors. The deep trench capacitors GlobalFoundries mentions are built into the silicon to steady the power delivered to the chips above. "Advanced packaging is becoming increasingly critical to delivering the performance, power efficiency and scale required for next-generation AI systems," said Ed Kaste, senior vice president of GlobalFoundries' CMOS business, in the release.

The deal comes as TSMC struggles to make enough of the packages itself. Advanced packaging has become a major constraint on AI chip production, with demand outstripping manufacturing capacity, Reuters reported. Nvidia has reserved about 800,000 to 850,000 wafers of TSMC's CoWoS capacity for 2026, more than half of the total, and TSMC's monthly capacity is projected to rise from about 70,000 wafers in 2025 to between 130,000 and 140,000 by the end of this year, still leaving a supply gap of about 20 per cent this year, TrendForce reported in August, citing the Chinese tech site Mydrivers. The same TrendForce report, citing the Korean outlet ETNews, said TSMC was widening its outsourcing of chip-on-wafer, the step that attaches dies to the interposer, to the assembly specialists ASE, Amkor and SPIL, which had long done the later wafer-on-substrate step under licence.

The interposers themselves are getting bigger. TSMC's current CoWoS is 5.5 times the size of a lithography reticle, the largest in production, and the company plans a 14-reticle version able to carry 20 HBM stacks in 2028, the year Malta is due to ramp, according to a TrendForce summary of TSMC's May technology symposium, which cited Reuters and the Taiwanese press. The larger the interposer, the fewer fit on a wafer. Institutional investors expect TSMC's CoWoS capacity to double again, from 130,000 wafers a month at the end of 2026 to 260,000 by the end of 2028, the Economic Daily News reported, according to TrendForce.

That expansion is focused on TSMC's AP7 site in Taiwan and its AP9 and AP10 sites in Arizona, the paper reported, and the American pieces are still being assembled. Amkor raised the planned investment in the second phase of its Arizona campus from $7bn to $12bn, with production expected to begin in 2028, and signed a ten-year agreement in June to provide advanced packaging and testing services to TSMC in Arizona, TrendForce reported in September. TSMC's own first advanced packaging plant in Arizona is planned to come online before 2029. GlobalFoundries' release does not say which TSMC customers the Malta interposers will serve, nor whether they will be packaged in the US or shipped to Taiwan.

For GlobalFoundries the sum is meaningful but not large. The company reported revenue of $6.791bn for 2025 in its full-year results. Spread evenly over five years, $2bn would be about $400m a year, or about 6 per cent of that revenue, by our arithmetic, though the release does not say how the value is counted, how it is phased, or when the five-year term begins relative to the 2028 ramp. It gives no volumes or prices. Its shares were up about 4 per cent in premarket trading on Thursday, Reuters reported.

The deal fits where GlobalFoundries has been steering. Its second-quarter results showed revenue of $1.786bn and guidance of $1.885bn, plus or minus $25m, for the third quarter. "We continue to see strong momentum, accelerating customer demand, and revenue growth across our strategic growth drivers, including Optical Networking within the AI data center, where our differentiated silicon photonics and silicon germanium technologies are driving meaningful value for our customers," Tim Breen, the chief executive, said then. In January 2025 the company announced a $575m advanced packaging centre at Malta, and in November 2024 the Commerce Department finalised a $1.5bn CHIPS Act award to the company, which is meant to help triple the Malta campus's capacity, Manufacturing Dive reported. In June 2025 it pledged to invest $16bn in the US, $13bn of it to expand its plants in New York and Vermont, TrendForce reported.

It is also the second time in a year that the two former courtroom rivals have found a use for each other. In November 2025 GlobalFoundries licensed TSMC's 650-volt and 80-volt gallium nitride technology for its plant in Burlington, Vermont, as TSMC prepared to leave the GaN foundry business by July 2027, Semiconductor Today reported. That deal took a business TSMC no longer wanted. This one takes a share of a business TSMC cannot build fast enough, at the less advanced end of it, where GlobalFoundries does not have to compete with TSMC's leading-edge processes. We found no separate statement from TSMC on the agreement as of Thursday evening.