TSMC pays its old courtroom rival $2 billion to move an AI chip bottleneck to New York

The wiring board that never left Taiwan

A silicon interposer is a slice of processed silicon carrying the wiring between an AI accelerator's logic dies and its memory stacks. It is the core of chip-on-wafer-on-substrate, the CoWoS packaging TSMC▼−1.25% — TSMC, down 1.25 percent today uses on products including Nvidia's▼−1.60% — Nvidia, down 1.60 percent today AI accelerators, and until this deal every one was made in Taiwan ³.

On October 8 GlobalFoundries▼−0.09% — GlobalFoundries, down 0.09 percent today said it will build interposers at its fab in Malta, New York↗, under a five-year agreement worth about $2 billion, with volume production ramping in the first half of 2028 ¹². Malta becomes the first U.S.-based source of the part, and GlobalFoundries↗ shares rose as much as 7 percent on the news ¹⁴.

A bottleneck answered only in 2028

Advanced packaging has become a major constraint on AI chip production, with demand exceeding available capacity ¹. When TSMC began producing Blackwell, Nvidia's current AI-chip generation, at its Arizona plant last year, the finished product still went back to Taiwan for assembly ⁵.

The other U.S. fixes also wait: a CoWoS-compatible line at Amkor, an outsourced chip assembly and test provider, is expected online in 2028, and TSMC's own Arizona packaging plant in 2029 ⁵. Malta joins that queue.

The rival TSMC sued in 2019

GlobalFoundries sued first on August 26, 2019↗, naming TSMC and 20 other defendants, Nvidia and Apple▲+1.37% — Apple, up 1.37 percent today among them, distributors included, in U.S. and German courts ⁶. TSMC countersued on October 1 in the United States, Germany and Singapore; the two settled on October 29 under a life-of-patents cross-license ⁶. The license left them free to trade, and the new deal makes GlobalFoundries a supplier to the company it sued.

Spend now, get paid in 2028

Two billion dollars across five years averages roughly $400 million a year if the value spreads evenly, about 6 percent of the $6.94 billion GlobalFoundries booked over the past four quarters, and none of it arrives before 2028 ¹⁷. The spending arrives earlier: second-quarter capital expenditure was $411 million, up 158 percent year over year↗ and four times the 2024 low ⁷.

The customers are already spending: GlobalFoundries' combined communications-infrastructure and data-center end market rose 60 percent year over year in the second quarter↗ ².

Malta's new line depends on one buyer and one wiring design

Silicon interposers are not the only way to wire a package. CoWoS-R replaces the interposer with redistribution wiring; CoWoS-L keeps only local silicon bridges; neither company has publicly limited the deal to one variant ⁸. Intel Foundry already sells CoWoS-comparable packaging that accepts TSMC-made silicon ⁵.

If packaging drifts away from the interposer, or TSMC's own Arizona plant takes the work, Malta is left with one customer's forecast ⁵⁸. The offset is a built-in framework to add capacity as demand grows ¹⁸.

The CoWoS question lands on TSMC's October 15 call

TSMC is expected to post a sixth straight record quarter↗ after third-quarter revenue of NT$1.49 trillion↗, up about 39 percent from a year earlier on the company's own disclosure ⁹¹⁰. The call on October 15 brings fourth-quarter guidance, gross-margin and 2027 AI-demand questions, against a capex budget raised in July to $60 billion to $64 billion ⁹¹¹. The CoWoS question lands there.