According to Taiwan’s “United Daily News”, as TSMC’s supply chain expands CoWoS advanced packaging production capacity, the increase in the price of these interlayer films will eventually push up the cost of AI chips produced by the company.
TSMC is investing billions of dollars to upgrade its packaging capabilities due to strong demand for AI products. The company announced in July this year that it would invest US$2.89 billion to build a new chip packaging plant. The company aims to increase packaging production capacity to 30,000 pieces per month by the end of 2024.
Note: CoWoS is a technology that stacks multiple chip dies together. This technology can place these chip dies on a silicon interlayer to improve their performance.
It is reported that TSMC is purchasing CoWoS machines from equipment factories such as Xinyun, Wanrun, Hongsu, Titanium, and Qunyi. These companies are expected to become the biggest beneficiaries of the growth in demand for TSMC’s CoWoS products. They are expected to complete delivery and installation in the first half of next year. .
According to industry sources, TSMC’s current CoWoS advanced packaging monthly production capacity is about 12,000 pieces. After the previous expansion, the original monthly production capacity will gradually expand to 15,000 to 20,000 pieces. After that, additional equipment will be added to the factory, which will increase TSMC’s production capacity. The monthly production capacity can reach more than 25,000 pieces, or even close to 30,000 pieces, which will increase TSMC’s ability to undertake AI-related orders. Due to related production capacity upgrades, TSMC’s AI chips will also see price increases.
In addition, Taiwanese media pointed out that NVIDIA is currently the largest customer of TSMC’s CoWoS advanced packaging, with order volume accounting for 60% of production capacity. Recently, NVIDIA has expanded its orders in response to strong demand for AI computing, and urgent orders from customers such as Amazon and Broadcom have also begun to emerge.
Taking into account the urgent demand from customers for CoWoS advanced packaging production capacity, TSMC has once again pursued 30% of the order for equipment manufacturers, and requires that the delivery and installation be completed by the end of the second quarter of next year, and mass production will begin in the second half of next year.