Rumors of TSMC CoWoS Order Cuts

Following NVIDIA's Q4 earnings report, industry sources disclosed that the company has further reduced orders for CoWoS advanced packaging. Additionally, the previously discussed outsourcing of the Chip on Wafer (CoW) front-end packaging process has failed to reach a consensus.

Analysts suggest that TSMC's advanced process capacity is still near full utilization, even exceeding its output earlier in the year. However, as NVIDIA's previous generation Hooper GPUs approach the end of their lifecycle, overall orders may begin to decline, with the next-generation GB300 expected to drive renewed demand.

On March 2, TSMC declined to comment on these rumors.

A packaging supply chain insider pointed out that recent CoWoS-related orders from TSMC remain in high demand and have not been reduced. The perceived reduction may be attributed to the transition between technology generations or the emergence of new clients shifting focus to next-generation fan-out panel-level packaging (FOPLP), leading to misunderstandings.

Earlier this year, reports emerged suggesting a cut in TSMC's CoWoS orders. During TSMC's investor conference in January, CEO Wei Zhejia indirectly denied these rumors, stating, “There have been many rumors outside; our company continues to expand production to meet customer demands.” Last week, Jensen Huang, CEO of NVIDIA, further clarified during NVIDIA's earnings call that supply chain issues concerning the Blackwell series chips had been fully resolved, noting that demand remains "extremely strong."

Industry analysis indicates that for NVIDIA, the Hopper architecture series—comprising H10, H100, and H200 AI chips—will cease production by mid-year, with customers shifting to the Blackwell architecture, including B200 and B300 models. However, the Blackwell architecture uses TSMC's CoWoS-L advanced packaging, which incorporates both local silicon interposer (LSI) and redistribution layer (RDL) technologies. This process currently has a yield of only 70-80%, compared to the previous CoWoS-S's yield of 99%. As a result, production volumes are lower than before, contributing to the overall decline in TSMC's CoWoS monthly output this year.