NVIDIA GB200 Shortage Spurs Demand in Backend Testing

NVIDIA has launched its latest GB200 and B-series artificial intelligence (AI) chips based on the new Blackwell architecture, generating high demand among electronic component suppliers. Following NVIDIA's significant increase in orders with TSMC for advanced manufacturing processes, the surge in orders has extended to backend testing facilities. Companies like ASE Technology Holding Co., Ltd. and KYEC have seen a substantial increase in operations, with fourth-quarter orders showing a doubling in seasonal growth rates.

ASE Technology Holding Co., Ltd. typically refrains from commenting on specific customer order trends, while KYEC indicates high current capacity utilization without specifying individual customers. Sources reveal that KYEC is managing increased demand from NVIDIA by mobilizing internal resources to meet these large orders through enhanced production capacity allocation.

Industry analysts predict that NVIDIA's additional orders at TSMC will lead to a proportional increase in demand for backend testing services. TSMC's expanded output will first reflect in related performances, with backend testing facilities following suit.

According to TrendForce, industry experts anticipate NVIDIA's GB200 super AI chips, based on the Blackwell architecture, could potentially ship over a million units by 2025. With TSMC as NVIDIA's exclusive manufacturing partner for these chips, ASE Technology Holding Co., Ltd. and KYEC are positioned as significant beneficiaries in backend testing.

The extended testing timelines for NVIDIA's GB200 and B-series AI chips under the Blackwell architecture have positively impacted average selling prices (ASP) and gross profit margins for collaborating factories. ASE Technology Holding Co., Ltd. leverages its strategic SiP and testing capabilities to serve NVIDIA comprehensively from wafer processing to backend testing.

ASE Technology Holding Co., Ltd. is optimistic about the surge in AI and high-performance computing (HPC) opportunities driving demand for advanced packaging, expecting this growth trend to continue unabated until 2025, potentially doubling its AI advanced packaging business performance this year.

KYEC is actively responding to NVIDIA's increased orders with comprehensive operational adjustments. Sources indicate a significant increase in NVIDIA's orders at KYEC, projecting a doubling in the fourth quarter compared to the third quarter. As product complexity rises and testing times lengthen, KYEC faces severe production capacity constraints at its facilities. Plans are underway to allocate a significant portion of its Copper Row 3 facility for NVIDIA chip testing, expected to contribute significantly from the fourth quarter through next year.

Currently, KYEC derives the majority of its revenue from testing services, with packaging accounting for the remainder. NVIDIA's increased orders have pushed KYEC's testing line utilization rates to high levels.