GPU Giants Seek New Suppliers for CoWoS Constraints!

Recent reports highlight a remarkable surge in demand for high-end GPUs, powered by the widespread adoption of AI technologies like ChatGPT and increased data center usage. To meet this growing demand, NVIDIA is actively exploring the addition of new suppliers to optimize its HBM3 and 2.5D packaging orders.

According to reliable sources, NVIDIA is currently in negotiations with potential suppliers, including Samsung, to become secondary providers for the packaging of NVIDIA A100 and H100 GPUs using cutting-edge 2.5D technology. Other contenders for this role include Amkor Technology, a prominent US packaging and testing provider, and Siliconware Precision Industries Co., a well-known packaging and testing subsidiary of Powerchip Technology Corporation.

NVIDIA's A100 and H100 GPUs are currently being exclusively manufactured by TSMC, leveraging their advanced CoWoS (Chip-on-Wafer-on-Substrate) packaging technology. However, the soaring demand for AI applications has strained TSMC's CoWoS production capacity, resulting in the need to outsource orders to other manufacturers.

Samsung made significant strides by establishing its Advanced Packaging (AVP) division in December 2022, aiming to capitalize on the lucrative high-end packaging and testing market. If NVIDIA approves of Samsung's impressive 2.5D packaging process yield rate, Samsung could potentially secure up to 10% of NVIDIA's AI GPU packaging orders.

Addressing the burgeoning demand for CoWoS packaging, TSMC plans to expand its CoWoS capacity by over 40%. To ensure timely fulfillment of orders, Samsung must promptly undergo NVIDIA's supplier evaluation process.

Additionally, to enhance overall AI server performance and memory bandwidth, high-end GPUs, including NVIDIA's offerings, often incorporate High Bandwidth Memory (HBM). Samsung is actively engaged in HBM development, planning to commence HBM3 mass production this year while eagerly competing for NVIDIA's HBM3 orders.

The advanced packaging industry is poised for substantial growth, driven by the escalating demand for AI chips and HBM.

Recent data from TrendForce, a renowned global market research firm, projects TSMC's monthly CoWoS capacity to reach 12K by the end of 2023, owing to robust demand for high-end AI chips and HBM. NVIDIA's demand for CoWoS capacity for A100 and H100 AI server chips is expected to surge by nearly 50% since the beginning of the year.

 Furthermore, the escalating demand for high-end AI chips from major players like AMD and Google is anticipated to intensify competition for CoWoS capacity in the latter half of 2023 and continue into 2024. During this period, it is predicted that advanced packaging capacity may grow by 3-4% with the right equipment in place.