[News] TSMC’s Advanced Packaging Capacity Fully Booked by NVIDIA and AMD Through Next Year

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With the flourishing of AI applications, two major AI giants, NVIDIA and AMD, are fully committed to the high-performance computing (HPC) market. It’s reported by the Economic Daily News that they have secured TSMC’s advanced packaging capacity for CoWoS and SoIC packaging through this year and the next, bolstering TSMC’s AI-related business orders.

TSMC holds a highly positive outlook on the momentum brought by AI-related applications. During the April earnings call, CEO C.C. Wei revised the visibility of AI orders and their revenue contribution, extending the visibility from the original expectation of 2027 to 2028.

TSMC anticipates that revenue contribution from server AI processors will more than double this year, accounting for a low-teens percentage of the company’s total revenue in 2024. It also expects a 50% compound annual growth rate for server AI processors over the next five years, with these processors projected to contribute over 20% to TSMC’s revenue by 2028.

Per the industry sources cited by the same report from Economic Daily News, they have indicated that the strong demand for AI has led to a fierce competition among the four global cloud service giants, including Amazon AWS, Microsoft, Google, and Meta, to bolster their AI server arsenal. This has resulted in a supply shortage for AI chips from major manufacturers like NVIDIA and AMD.

Consequently, these companies have heavily invested in TSMC’s advanced process and packaging capabilities to meet the substantial order demands from cloud service providers. TSMC’s advanced packaging capacity, including CoWoS and SoIC, for 2024 and 2025 has been fully booked.

To address the massive demand from customers, TSMC is actively expanding its advanced packaging capacity. Industry sources cited by the report have estimated that by the end of this year, TSMC’s CoWoS monthly capacity could reach between 45,000 to 50,000 units, representing a significant increase from the 15,000 units in 2023. By the end of 2025, CoWoS monthly capacity is expected to reach a new peak of 50,000 units.

Regarding SoIC, it is anticipated that the monthly capacity by the end of this year could reach five to six thousand units, representing a multiple-fold increase from the 2,000 units at the end of 2023. Furthermore, by the end of 2025, the monthly capacity is expected to surge to a scale of 10,000 units.

It is understood that NVIDIA’s mainstay H100 chip currently in mass production utilizes TSMC’s 4-nanometer process and adopts CoWoS advanced packaging. Additionally, it supplies customers with SK Hynix’s High Bandwidth Memory (HBM) in a 2.5D packaging form.

As for NVIDIA’s next-generation Blackwell architecture AI chips, including the B100, B200, and the GB200 with Grace CPU, although they also utilize TSMC’s 4-nanometer process, they are produced using an enhanced version known as N4P. The production for the B100, per a previous report from TechNews, is slated for the fourth quarter of this year, with mass production expected in the first half of next year.

Additionally, they are equipped with higher-capacity and updated specifications of HBM3e high-bandwidth memory. Consequently, their computational capabilities will see a multiple-fold increase compared to the H100 series.

On the other hand, AMD’s MI300 series AI accelerators are manufactured using TSMC’s 5-nanometer and 6-nanometer processes. Unlike NVIDIA, AMD adopts TSMC’s SoIC advanced packaging to vertically integrate CPU and GPU dies before employing CoWoS advanced packaging with HBM. Hence, the production process involves an additional step of advanced packaging complexity with the SoIC process.

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(Photo credit: TSMC)