According to a report by Taiwan’s Commercial Times, the semiconductor market is expected to slow down this year. PSMC Chairman Frank Huang stated that it is estimated that the current wave of semiconductor inventory clearance will not be completed until the end of the first quarter of next year, and the overall market conditions for next year are still not expected to rebound strongly.

When asked about the mature wafer fabs in mainland China aggressively capturing market share this year with low prices, Frank Huang emphasized that this was anticipated. He further stated that PSMC is planning to launch affordable AI chips primarily targeting the consumer market next year, completely differentiating them from Nvidia’s high-priced products. Given the large scale of the consumer market, he expressed optimism regarding future shipment growth.

Huang emphasized that PSMC’s planned AI chips with AI functionality are like miniature computers. Currently, international chip manufacturers offer AI chips with unit prices as high as $200,000, making them impossible for widespread adoption in the consumer market. Therefore, the AI chips PSMC plans to launch next year will have lower prices and will be specifically tailored for the massive consumer market. He gave examples, including affordable AI features being integrated into toys and household appliances. Toys, for instance, will be able to recognize their owners and engage in voice interactions.

Huang mentioned that, because they are targeting affordability and mass appeal, these AI chips will be produced using a 28-nanometer process and are expected to contribute to revenue through formal shipments next year. With a focus on the consumer market, Huang is optimistic about the future shipments and business contributions of these AI chips.

According to Liberty Times Net, Inventec, a prominent player in the realm of digital technology, is making significant strides in research and development across various domains, including artificial intelligence, automotive electronics, 5G, and the metaverse. The company has recently introduced a new all-aluminum liquid-cooled module for its general-purpose graphics processing units (GPGPU) powered by NVIDIA’s A100 chips. Additionally, this innovative technology is being applied to AI server products featuring AMD’s 4th Gen EPYC dual processors, marking a significant step towards the AI revolution.

Inventec has announced that their Rhyperior general-purpose graphics processors previously offered two cooling solutions: air cooling and air cooling with liquid cooling. The new all-aluminum liquid-cooled module not only reduces material costs by more than 30% compared to traditional copper cooling plates but also comes with 8 graphics processors (GPUs) and includes 6 NVIDIA NVSwitch nodes. This open-loop cooling system eliminates the need for external refrigeration units and reduces fan power consumption by approximately 50%.

Moreover, Inventec’s AI server product, the K885G6, equipped with AMD’s 4th Gen EPYC dual processors, has demonstrated a significant reduction in data center air conditioning energy consumption of approximately 40% after implementing this new cooling solution. The use of water as a coolant, rather than environmentally damaging and costlier chemical fluids, further enhances the product’s appeal, as it can support a variety of hardware configurations to meet the diverse needs of AI customers.

Inventec’s new facility in Mexico has commenced mass production, with plans to begin supplying high-end NVIDIA AI chips, specifically the H100 motherboards, in September. They are poised to increase production further in the fourth quarter. Additionally, in the coming year, the company is set to release more Application-Specific Integrated Circuit (ASIC) products, alongside new offerings from NVIDIA and AMD. Orders for server system assembly from U.S. customers (L11 assembly line) are steadily growing. The management team anticipates showcasing their innovations at the Taiwan Excellence Exhibition in Dongguan, China, starting on October 7th, as they continue to deepen their collaboration with international customers.

(Source: https://ec.ltn.com.tw/article/breakingnews/4412765)

According to a report by Taiwan’s Commercial Times, NVIDIA is facing repercussions from the US chip restriction, leading to controls on the export of high-end AI GPU chips to certain countries in the Middle East. Although NVIDIA claims that these controls won’t have an immediate impact on its performance, and industry insiders in the Taiwanese supply chain believe the initial effects are minimal. However, looking at the past practice of prohibiting exports to China, this could potentially trigger another wave of preemptive stockpiling.

Industry sources from the supply chain note that following the US restrictions on exporting chips to China last year, the purchasing power of Chinese clients increased rather than decreased, resulting in a surge in demand for secondary-level and below chip products, setting off a wave of stockpiling.

Take NVIDIA’s previous generation A100 chip for instance. After the US implemented export restrictions on China, NVIDIA replaced it with the lower-tier A800 chip, which quickly became a sought-after product in the Chinese market, driving prices to surge. It’s reported that the A800 has seen a cumulative price increase of 60% from the start of the year to late August, and it remains one of the primary products ordered by major Chinese CSPs.

Furthermore, the recently launched L40S GPU server by NVIDIA in August has become a market focal point. While it may not match the performance of systems like HGX H100/A100 in large-scale AI algorithm training, it outperforms the A100 in AI inference or small-scale AI algorithm training. As the L40S GPU is positioned in the mid-to-low range, it is currently not included in the list of chips subject to export controls to China.

Supply chain insiders suggest that even if the control measures on exporting AI chips to the Middle East are further enforced, local clients are likely to turn to alternatives like the A800 and  L40S. However, with uncertainty about whether the US will extend the scope of controlled chip categories, this could potentially trigger another wave of purchasing and stockpiling.

The primary direct beneficiaries in this scenario are still the chip manufacturers. Within the Taiwanese supply chain, Wistron, which supplies chip brands in the AI server front-end GPU board sector, stands to gain. Taiwanese supply chain companies producing A800 series AI servers and the upcoming L40S GPU servers, such as Quanta, Inventec, Gigabyte, and ASUS, have the opportunity to benefit as well.

(Photo credit: NVIDIA)

According to the news from Liberty Times Net, NVIDIA’s Q2 financials and Q3 forecasts have astounded the market, driven by substantial growth in their AI-centric data center operations. NVIDIA addresses CoWoS packaging supply issues by collaborating with other suppliers, boosting future capacity, and meeting demand. This move is echoed in South Korea’s pursuit of advanced packaging strategies.

South Korea’s Swift Pursuit on Advanced Packaging

The semiconductor industry highlights that the rapid development of generative AI has outpaced expectations, causing a shortage of advanced packaging production capacity. Faced with this supply-demand gap, TSMC has outsourced some of its capacity, with Silicon Interposer production being shared by facilities under the United Microelectronics Corporation and Siliconware Precision Industries. UMC has also strategically partnered with Siliconware Precision Industries, and Amkor’s Korean facilities have joined the ranks of suppliers to augment production capacity.

Due to equipment limitations, TSMC’s monthly CoWoS advanced packaging capacity is expected to increase from 10,000 units to a maximum of 12,000 units by the end of this year. Meanwhile, other suppliers could potentially raise their CoWoS monthly capacity to 3,000 units. TSMC aims to boost its capacity to 25,000 units by the end of next year, while other suppliers might elevate theirs to 5,000 units.

According to the source South Korean media, Samsung entered the scene, competing for advanced packaging orders against NVIDIA. South Korea initiated a strategic research project to rapidly narrow the gap in packaging technology within 5~7 years, targeting giants like TSMC, Amkor, and China’s JCET.

(Source: https://ec.ltn.com.tw/article/paper/1601162)

Dell, a major server brand, placed a substantial order for AI servers just before NVIDIA’s Q2 financial report. This move is reshaping Taiwan’s supply chain dynamics, favoring companies like Wistron and Lite-On.

Dell is aggressively entering the AI server market, ordering NVIDIA’s top-tier H100 chips and components. The order’s value this year is estimated in hundreds of billions of Taiwanese dollars, projected to double in the next year. Wistron and Lite-On are poised to benefit, securing vital assembly and power supply orders. EMC and Chenbro are also joining the supply chain.

Dell’s AI server order, which includes assembly (including complete machines, motherboards, GPU boards, etc.) and power supply components, stands out with its staggering value. The competition was most intense in the assembly sector, ultimately won by Wistron. In the power supply domain, industry leaders like Delta, Lite-On, secured a notable share, with Lite-On emerging as a winner, sparking significant industry discussions.

According to Dell’s supply chain data, AI server inventory will reach 20,000 units this year and increase next year. The inventory primarily features the highest-end H100 chips from NVIDIA, with a few units integrating the A100 chips. With each H100 unit priced at $300,000 and A100 units exceeding $100,000, even with a seemingly modest 20,000 units, the total value remains in the billions of New Taiwan Dollars.

Wistron is a standout winner in Dell’s AI server assembly order, including complete machines, motherboards, and GPU boards. Wistron has existing H100 server orders and will supply new B100 baseboard orders. Their AI server baseboard plant in Hsinchu, Taiwan will expand by Q3 this year. Wistron anticipates year-round growth in the AI server business.