The capacity gap is as high as 20%! HPC orders are booming, TSMC expedites production expansion

According to the latest news, AI chip orders remain high, making TSMC’s advanced packaging CoWoS production capacity continue to be in short supply. In June, it was reported that the gap was as high as 20%. Now TSMC is accelerating production expansion, and it is also chasing orders from equipment manufacturers, requiring suppliers to do their best to shorten delivery. period support.

Previously, it was reported that due to strong orders from HPC customers such as Nvidia, TSMC’s advanced packaging CoWoS production capacity was tight, with a gap of 10-20%, and customers requested TSMC to expand CoWoS production capacity. TSMC also confirmed that due to the sudden increase in demand for AI orders, the demand for advanced packaging is much greater than the existing production capacity, and now it is forced to urgently increase production capacity.

In fact, the supply of AI GPUs is in short supply, and the main bottleneck is CoWoS packaging. As an advanced packaging technology, CoWoS was originally used in niche markets such as high-speed computing. The main customers are Nvidia, Google, AMD, and Amazon. The cost is relatively high, about 4,000 to 6,000 US dollars per wafer, much higher than TSMC’s other packaging technology InFO $600. Now CoWoS has become a widely used packaging technology in the field of HPC and AI computing. Most of the high-performance chips using HBM, including most start-up AI training chips, have applied CoWoS.

As for the shortage of GPUs, semiconductor equipment manufacturers said that the main reason is that Nvidia and TSMC previously estimated that their annual production capacity and orders were quite conservative. They did not expect the demand for HPC chips such as AI GPUs to erupt, and the CoWoS wet process with a small production capacity Advanced packaging equipment is difficult to meet. In addition, the lead time for some packaging equipment and components is as long as 3 to 6 months, and the new production capacity will be slowly in place at the end of the year at the earliest. In other words, there will be a shortage of goods in the next six months.

For TSMC, the expansion of CoWoS is the current focus. Recently, industry sources said that due to the high demand for CoWoS, TSMC pursued orders from equipment manufacturers at the end of June, requiring suppliers to fully shorten the delivery time support.

Some equipment manufacturers said that TSMC's advanced packaging production capacity is dominated by InFO, and its main customer is Apple. CoWoS production capacity will increase significantly in the second quarter of 2023, driven by Nvidia's large-scale production capacity. It is estimated that TSMC's annual production capacity in 2023 will be at least 120,000 In 2024, the production capacity can be expanded to nearly 175,000-200,000 pieces, and Nvidia has contracted 40% of the production capacity in advance.

In 2023, the second and third largest customers are Broadcom and Xilinx respectively. It is worth mentioning that, in addition to AMD's MI300 series launch in the fourth quarter, the order scale squeezed into the top five, Amazon and TSMC are getting closer and closer. 2024 will be the third largest CoWoS customer.