Morgan Stanley Research Report Analysis: 2027 CoWoS Demand to Double, AMD and ASIC Become New Engines for AI Chips
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Morgan Stanley Research Report Analysis: 2027 CoWoS Demand to Double, AMD and ASIC Become New Engines for AI Chips
The prosperity of the AI supply chain is expected to last at least until 2028.
Navigating Web3 tides with focused insightsBy: Rita
TechFlow Guide
Morgan Stanley released its latest AI supply chain report on July 8, providing a comprehensive update on CoWoS advanced packaging allocation and ASIC dynamics for 2027. The core judgment of the report is: global CoWoS demand will reach 2.694 million wafers in 2027, a 93% increase from 1.394 million wafers in 2026. NVIDIA still holds the largest share (1.222 million wafers, 45%), but AMD is becoming the biggest variable with a growth rate of 308%. More importantly, CPUs are beginning to adopt CoWoS packaging on a large scale; AMD Venice CPU shipments are expected to reach 6.75 million units in 2027, which is a key signal of AI computing demand spreading from GPUs to broader chip categories. The so-called "inventory" problem of Blackwell chips has been confirmed as supply chain buffer and will be fully digested within 2026.
AMD's CoWoS Allocation: 240k Wafers Unchanged, but Execution Risks Cannot Be Ignored
Morgan Stanley confirmed in the report that AMD's 2027 CoWoS allocation remains at 240k wafers, an increase of about 85% from 130k wafers in 2026. The MI400 series will be divided into two versions: MI455 is the standard version, equipped with 2 compute dies and 12 HBM4 12hi, paired with Helios racks (18 CPUs + 72 GPUs), mainly for Microsoft, AWS, and Oracle; MI450 is the Meta custom version, with half the chip size, equipped with 1 compute die and 6 HBM4 12hi. Morgan Stanley expects 1 million MI455 shipments and 500k MI450 shipments in 2027.
However, Morgan Stanley also warned: AMD's execution risks cannot be ruled out; AMD has reduced CoWoS bookings before in 2026. This is a signal worth alerting to: even if demand is clear, the matching of capacity and yield remains a variable.
CPUs Join the CoWoS Camp: Venice is the Watershed
Venice is AMD's first CPU to adopt CoWoS packaging; CoW production is concentrated at packaging and testing factories such as ASE/SPIL, Amkor, and Powertech. Morgan Stanley expects total CPU chip shipments in 2027 to reach 5.7 million to 6 million units, far higher than 1 million units in 2026. The packaging demand for 6.75 million Venice CPUs means CoWoS application scenarios are expanding from AI accelerators to mainstream server CPUs on a large scale.
This is a clear incremental signal for the advanced packaging equipment industry chain. Continued tight CoWoS capacity will accelerate the domestic substitution process of advanced packaging equipment. Packaging and testing leaders such as JCET and Tongfu Microelectronics are expected to benefit from OSAT capacity spillover.
Google TPU: Sunfish Delayed but Not Cancelled, Shipments Concentrated in 4Q
Morgan Stanley's industry survey shows that KYEC's 3Q26 revenue may grow nearly 10% quarter-over-quarter, lower than the previous expectation of 15%, mainly due to slight delays in Rubin and Sunfish, and reduced MediaTek smartphone SoC orders. However, Sunfish full-year shipments remain at 960k units, with shipments concentrated in 4Q26 or 1Q27, with no order cuts. Zebrafish's 4Q26 shipment schedule remains unchanged.
The delay of Google TPU means an extension of the time window for the domestic AI chip supply chain. Domestic AI chip manufacturers such as Cambricon and Hygon Information still have room to catch up.
NVIDIA: Blackwell Inventory is an Illusion, Rubin is the Real Volume
Morgan Stanley gave a clear conclusion on the Blackwell chip inventory problem: the so-called "inventory" is actually a supply chain buffer and will be fully digested within 2026, with no need to worry about inventory issues. Blackwell shipments are expected to be 5.4 million units in 2026, with chip production sufficient to meet Grace Blackwell NVL72 demand in 2H26.
Rubin is the real increment. Morgan Stanley expects Rubin and Rubin Ultra chip shipments to approach 7 million units in 2027, with Rubin NVL72 server racks reaching 90k racks. Rubin will start ramping up in 3Q26 and start rack shipments in 4Q26.
For A-share investors, the increase in Rubin means that domestic AI supply chain links such as optical modules, PCB, and heat dissipation will welcome continuous orders. The earnings visibility of targets such as InnoLight and Victory Giant Technology will improve with the volume release of Rubin.
TechFlow Perspective
The core logic of this Morgan Stanley report is: AI chip competition is shifting from "who can design the best chip" to "who can get enough advanced packaging capacity". CoWoS grows from 1.394 million wafers in 2026 to 2.694 million wafers in 2027, more than doubling, but demand side growth is faster. NVIDIA, AMD, Google, Amazon, Broadcom, everyone is competing for CoWoS capacity.
In this round of capacity competition, the biggest structural change is CPUs beginning to adopt CoWoS on a large scale. The shipment expectation of 6.75 million AMD Venice CPUs in 2027 means CoWoS application scenarios have expanded from AI accelerators to server CPUs, which is a clear incremental signal for the advanced packaging equipment industry chain.
Three observation dimensions are worth continuous tracking: NVIDIA Rubin is the largest single increment in 2027, AMD Venice CPU is a structural new increment of CoWoS demand, and Google TPU's time window leaves room for domestic AI chips to catch up. Superimposing the three dimensions, the prosperity of the AI supply chain can be outlooked at least until 2028.
Disclaimer
This article is a compilation and interpretation by TechFlow Research of a third-party securities firm research report (Morgan Stanley, July 8, 2026). The ratings, target prices, earnings forecasts, and related judgments cited in the text are the views of the securities firm analysts, represent only the position of their affiliated institution, do not represent the views of TechFlow Research, and do not constitute any investment advice.
The market has risks, decisions need to be independent. This article should not be used as a basis for buying or selling any securities.
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