TSMC expands advanced packaging capacity to meet record demand from Nvidia GPU orders.
Artificial intelligence, high-performance computing, and PCs have been driving demand for advanced process technologies rapidly in recent years, with leading chipmakers expanding their leading-edge production capacities to accommodate the surge. Demand for advanced compute GPUs—such as Nvidia's A100 and H100—is now so high that TSMC is planning to expand its advanced packaging capacities. The bottleneck centers on chip-on-wafer-on-substrate (CoWoS) packaging technology, for which current demand far outpaces available capacity, prompting TSMC to accelerate efforts to boost production.
According to a DigiTimes report, TSMC has pledged to process an extra 10,000 CoWoS wafers for Nvidia throughout 2023. Given that Nvidia obtains about 60 A100/H100 GPUs per wafer, with the H100 being only slightly smaller than the A100, this commitment would supply approximately 600,000 additional top-end data center GPUs. The projections indicate an increase of about 1,000 to 2,000 wafers each month for the rest of the year. TSMC's monthly CoWoS output currently oscillates between 8,000 and 9,000 wafers, so supplying Nvidia with an additional 1,000 to 2,000 wafers monthly will significantly enhance the utilization rate of TSMC's high-end packaging facilities. This surge might lead to a supply scarcity of CoWoS services for other industry players due to heightened demand.
TSMC's production increase aims to support escalating demand for Nvidia's AI chips, which are extensively employed across the industry. Google recently launched its new A3 supercomputer based on Nvidia's H100, boasting 26 ExaFLOPS of AI performance. Similarly, several prominent firms—including Microsoft, Oracle, and Elon Musk's upcoming AI venture—have procured tens of thousands of Nvidia's AI GPUs in the past few months. Nvidia's current GPU range includes the A100, A30, H100, and China-exclusive A800 and H800 models. All of TSMC's facilities that provide advanced packaging services are located in Taiwan.