Advanced packaging has become the holy grail for cramming chiplets together to boost AI performance, which is why TSMC’s CoWoS lines are flooded by outfits such as Nvidia, AMD, Google, the Fruity Cargo Cult Apple, MediaTek and the rest of the silicon herd. Supply chain snitches say TSMC can no longer meet demand alone and is now farming out work to Taiwanese firms ASE Technology and SPIL, which are expected to mop up the spillover.

According to Money, TSMC is trying to expand CoWoS capacity with new plants in Taiwan and the US. Still, its clients want results yesterday, so the company has started outsourcing in earnest, marking a proper shift in tactics. ASE Technology has already said it is spending billions to expand its footprint to meet demand. At the same time, TSMC tries to keep customers happy and stop rivals, such as Troubled Chipzilla, from muscling into the packaging game.

Advanced packaging is now as critical as bleeding-edge process nodes. Nvidia, AMD and Job’s Mob are the biggest users of CoWoS-L and CoWoS-S, while Google, Qualcomm and MediaTek are eyeing options, which is why Troubled Chipzilla has suddenly become a contender in the packaging stakes. With TSMC leaning on outside partners, it now has a wider spread of production lines, which helps sidestep direct competition for customer slots.

The supply chain will be worth watching, since packaging has become central to modern computing, and it is clear that no single player can keep up with the industry’s appetite.