TSMC’s president acknowledged that the ongoing short supply of GPUs for artificial intelligence (AI) and high-performance computing (HPC) applications is due to limitations in its chip-on-wafer-on-substrate (CoWoS) packaging capabilities. The shortage is expected to persist for about 18 months due to increasing demand for generative AI applications and the relatively slow expansion of CoWoS capabilities at TSMC.
“It’s not a lack of AI chips, it’s a lack of our CoWoS capabilities,” TSMC president Mark Liu said in a conversation with Nikkei at Semicon Taiwan. “Currently, we cannot meet 100% of our customers’ needs, but we try to support about 80%. We think this is a temporary phenomenon. After the expansion of our (advanced chip packaging capacity), it should be reduced. Half a year .”
TSMC is the manufacturer of most AI processors, including Nvidia’s A100 and H100 compute GPUs that are integral to AI tools like ChatGPT and are primarily used in AI data centers. These processors, like solutions from other players such as AMD, AWS and Google, use HBM memory (which is essential for the proper functioning of high bandwidth and elaborate AI language models) and CoWoS packaging, which puts additional strain on TSMC’s advanced packaging facilities.
Liu said demand for CoWoS unexpectedly surged earlier this year, tripling year-on-year, causing current supply constraints. TSMC recognizes that the demand for generative AI services is growing and so is the demand for appropriate hardware, so it is accelerating the expansion of CoWoS capabilities to meet the demand for compute GPUs as well as specialized AI accelerators and processors.
Currently, the company is installing additional tools for CoWoS at its existing advanced packaging facilities, but this takes time and the company expects to double its CoWoS capacity by the end of 2024.
In addition, TSMC recently announced its intention to invest $2.9 billion in a new facility dedicated to advanced chip packaging. The facility, located near Miaoli, Taiwan, is a testament to the company’s commitment to meet the demand for advanced packaging in all sectors and its recognition of the importance of advanced chip packaging in the semiconductor industry.
This focus on advanced chip packaging is not unique to TSMC; Other industry giants such as Intel and Samsung are also prioritizing it, with Intel aiming to quadruple its top-tier chip packaging capacity by 2025. Traditional outsourced semiconductor assembly and test (OSAT) companies such as ASE and Amkor also have similar technologies to CoWoS, but they have yet to increase their capabilities compared to TSMC, Intel and Samsung.