To alleviate the capacity constraints of CoWoS advanced packaging, NVIDIA is reportedly planning to accelerate the introduction of its GB200, into panel-level fan-out packaging. According to a report from Economic Daily News, originally scheduled for 2026, this shift has been moved up to 2025, sparking opportunities in the panel-level fan-out packaging sector.

Taiwanese companies like Powertech Technology Inc. (PTI) and AU Optronics (AUO) are said to have prepared with the necessary capabilities, expected to seize this market opportunity.

The sources cited by the report from Economic Daily News explain that fan-out packaging has two branches: wafer-level fan-out packaging (FOWLP) and panel-level fan-out packaging (FOPLP). Among Taiwanese packaging and testing companies, PTI is reportedly the fastest in deploying panel-level fan-out packaging.

To capture the high-end logic chip packaging market, PTI has fully dedicated its Hsinchu Plant 3 to panel-level fan-out packaging and TSV CIS (CMOS image sensors) technologies, emphasizing that fan-out packaging can achieve heterogeneous integration of ICs.

PTI previously expressed optimism about the opportunities presented by the era of panel-level fan-out packaging, noting that it can produce chip areas two to three times larger than wafer-level fan-out packaging.

Innolux, a major panel manufacturer, is also optimistic, forecasting that 2024 will be the advanced packaging mass production inaugural year for the group. The first phase capacity of its fan-out panel-level packaging (FOPLP) production line has already been fully booked, with mass production and shipments scheduled to begin in the third quarter of this year.

Chairman of Innolux Jim Hung emphasized that advanced packaging technology (PLP) connects chips through redistribution layers (RDL), meeting the requirements for high reliability, high power output, and high-quality packaging products. This technology has secured process and reliability certifications from top-tier customers, and its yield rates have been well received, with mass production set to commence this year.

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(Photo credit: NVIDIA)

Samsung’s latest high bandwidth memory (HBM) chips have reportedly failed Nvidia’s tests, while the reasons were revealed for the first time. According to the latest report by Reuters, the failure was said to be due to issues with heat and power consumption.

Citing sources familiar with the matter, Reuters noted that Samsung’s HBM3 chips, as well as its next generation HBM3e chips, may be affected, which the company and its competitors, SK hynix and Micron, plan to launch later this year.

In response to the concerns raising by heat and power consumption regarding HBM chips, Samsung stated that its HBM testing proceeds as planned.

In an offical statement, Samsung noted that it is in the process of optimizing products through close collaboration with customers, with testing proceeding smoothly and as planned. The company said that HBM is a customized memory product, which requires optimization processes in tandem with customers’ needs.

According to Samsung, the tech giant is currently partnering closely with various companies to continuously test technology and performance, and to thoroughly verify the quality and performance of HBM.

Nvidia, on the other hand, declined to comment.

As Nvidia currently dominates the global GPU market with an 80% lion’s share for AI applications, meeting Nvidia’s stardards would doubtlessly be critical for HBM manufacturers.

Reuters reported that Samsung has been attempting to pass Nvidia’s tests for HBM3 and HBM3e since last year, while a test for Samsung’s 8-layer and 12-layer HBM3e chips was said to fail in April.

According to TrendForce’s analysis earlier, NVIDIA’s upcoming B100 or H200 models will incorporate advanced HBM3e, while the current HBM3 supply for NVIDIA’s H100 solution is primarily met by SK hynix. SK hynix has been providing HBM3 chips to Nvidia since 2022, Reuters noted.

According to a report from the Financial Times in May, SK hynix has successfully reduced the time needed for mass production of HBM3e chips by 50%, while close to achieving the target yield of 80%.

Another US memory giant, Micron, stated in February that its HBM3e consumes 30% less power than its competitors, meeting the demands of generative AI applications. Moreover, the company’s 24GB 8H HBM3e will be part of NVIDIA’s H200 Tensor Core GPUs, breaking the previous exclusivity of SK hynix as the sole supplier for the H100.

Considering major competitors’ progress on HBM3e, if Samsung fails to meet Nvidia’s requirements, the industry and investors may be more concerned on whether the Korean tech heavyweight would further fall behind its rivals in the HBM market.

(Photo credit: Samsung)

SK hynix has disclosed yield details regarding the company’s 5^th generation High Bandwidth Memory (HBM), HBM3e, for the first time. According to a report from the Financial Times, citing Kwon Jae-soon, the head of yield at SK hynix, the memory giant has successfully reduced the time needed for mass production of HBM3e chips by 50%, while close to achieving the target yield of 80%.

This is better than the industry’s previous speculation, which estimated the yield of SK Hynix’s HBM3e to be between 60% and 70%, according to a report by Business Korea.

According to TrendForce’s analysis earlier, NVIDIA’s upcoming B100 or H200 models will incorporate advanced HBM3e, while the current HBM3 supply for NVIDIA’s H100 solution is primarily met by SK hynix, leading to a supply shortfall in meeting burgeoning AI market demands.

The challenge, however, is the supply bottleneck caused by both CoWoS packaging constraints and the inherently long production cycle of HBM—extending the timeline from wafer initiation to the final product beyond two quarters.

The report by Business Korea noted that HBM manufacturing involves stacking multiple DRAMs vertically, which presents greater process complexity compared to standard DRAM. Specifically, the yield of the silicon via (TSV), a critical process of HBM3e, has been low, ranging from 40% to 60%, posing a significant challenge for improvement.

In terms of SK hynix’s future roadmap for HBM, CEO Kwak Noh-Jung announced on May 2nd that the company’s HBM capacity for 2024 and 2025 has almost been fully sold out. According to Business Korea, SK hynix commenced delivery of 8-layer HBM3e products in March and plans to supply 12-layer HBM3e products in the third quarter of this year. The 12-layer HBM4 (sixth-generation) is scheduled for next year, with the 16-layer version expected to enter production by 2026.

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(Photo credit: SK hynix)

According to a report from TechNews, TSMC held a technology forum on May 23, where Senior Fab Director pointed out that benefiting from HPC and mobile phone demands, the 3nm production capacity this year has more than tripled compared to last year, but this is actually still not enough, so efforts are still being made to meet customer demand.

During the forum, TSMC also indicated that its compound annual growth rate (CAGR) in advanced processes below 7nm surpassed 25% from 2020 to 2024. Moreover, TSMC remains committed to investment, with capital expenditure in 2024 increasing by 10% compared to the preceding four years.

Due to the booming demand for AI and HPC, TSMC is actively expanding its capacity for advanced processes. Huang stated that TSMC’s capacity for SoIC and CoWoS is experiencing CAGRs exceeding 100% and 60%, respectively, from 2022 to 2026.

The topic of TSMC’s manufacturing has always been a focus of the industry. In the past, it was presented by Executive Vice President and Co-Chief Operating Officer Y.P. Chyn, Vice President of Fab Operations I Dr. Y.L. Wang, and TSMC Vice President of Advanced Technology and Mask Engineering Dr. T.S. Chang. This time, it is presented for the first time by the key driver of the most advanced process and plant-level executives in Taiwan.

He mentioned that the share of TSMC’s special processes in maturity has also steadily increased, from 61% in 2020 to the target of 67% in 2024.

Huang further pointed out that TSMC averaged the construction of five fabs per year  between 2022 and 2023, increasing to seven this year. Among them are three fabs, two packaging plants, and two overseas facilities.

Fab 20 in Hsinchu and Fab 22 in Kaohsiung are both 2nm fabs, progressing smoothly and expected to commence production next year.

Taichung AP5 is expanding its capacity to meet the needs for CoWoS production, while the recently announced advanced packaging investment in Chiayi is for CoWoS and SOIC production.

In terms of global deployment, three fabs are planned in Arizona, USA. The first fab is already had its first tool-in, set to commence 4nm production next year, while the second fab is scheduled for 2028 production, and the third fab is expected to begin production by the end of the 2020s. In Japan, Kumamoto Fab 1 is slated for production in the fourth quarter of this year, with Fab 2 set for production in 2027.

In Europe, the Dresden fab will offer 16nm technology, with construction beginning in the fourth quarter of this year and production slated for 2027, mainly to meet European customer needs. Additionally, Nanjing Fab 16 in China continues to expand its 28nm capacity.

When discussing the application of EUV technology, he mentioned that TSMC’s EUV machine count has grown tenfold since 2019, now accounting for 65% of the global total. Both wafer output and efficiency have significantly increased along with learning.

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(Photo credit: TSMC)

Due to escalating geopolitical risks, Tesla is reportedly requesting its suppliers to begin manufacturing components and parts outside of China and Taiwan as early as 2025.

According to a report from Nikkei News on May 23rd, citing sources from the supply chain, suppliers of printed circuit boards, panels, and electronic controllers for models sold outside of China have recently received requests from Tesla to avoid China and Taiwan. The reason cited is the increasing geopolitical risks in the Greater China region prior to the U.S. presidential election. The objective of this move is to create alternative supply sources for markets outside of China to avoid disruptions in the supply chain.

Reportedly, a Taiwan-based supplier of Tesla revealed that Tesla wants all components to be OOC, OOT, meaning ‘out of China’ and ‘out of Taiwan.’ Allegedly, they hope this proposal can be implemented in new projects next year. Tesla is said to have made this request before the US government increased tariffs on Chinese electric cars fourfold to 100%.

Nikkei News’ report also indicates that Tesla has discussed this issue with suppliers in Japan, South Korea, and other Asian countries. A component supplier source cited in the same report mentioned that his company has responded to Tesla’s request by expanding production in Thailand. The source claimed that for many customers like Tesla, the “China Plus One” strategy—which involves diversifying investments beyond China into other countries—also includes avoiding Taiwan.

The report further cited sources, indicating that American car manufacturers such as General Motors and Ford are also instructing their suppliers to explore on relocating their electronic production lines away from China and Taiwan. However, they have not formally made requests similar to Tesla’s.

Another source cited in the report remarked that Tesla is the most proactive among American automakers in wanting to avoid risks associated with China and Taiwan, but implementing the OOC and OOT strategy is indeed challenging and costly.

Tesla has previously placed orders with TSMC for numerous chips related to electric vehicles. For instance, the supercomputer chip “D1” is utilizing TSMC’s 7nm technology along with advanced packaging processes.

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(Photo credit: Tesla)