The rise of artificial intelligence (AI) tools, led by ChatGPT, has dramatically increased demand for data center GPUs like NVIDIA's A100 and H100 over the past few months, which has strained the capacity of TSMC, which is responsible for manufacturing and packaging, for advanced packaging, and has had to urgently expand its 2.5D packaging capacity in order to meet the growing demand.

According to Wccftech, CoWoS packaging capacity has now been increased to 15,000 wafers per month as a result of TSMC's ongoing efforts, with NVIDIA taking up a 40 percent portion of that total and AMD taking up 8 percent. NVIDIA's sharp increase in orders also prompted TSMC to initiate a corresponding process earlier this year to cope with the increase in CoWoS packaging capacity. Rumor has it that by the first half of 2024. TSMC may further increase its CoWoS packaging capacity to 20,000 wafers per month.

If you compare the data that appeared in previous reports, you can see that TSMC's CoWoS packaging capacity increase is faster than expected. A few months ago there was news that TSMC planned to increase its existing CoWoS packaging capacity from 8,000 to 11,000 pieces per month by the end of 2023, and then further increase it to 14,500 to 16,600 pieces by the end of 2024, and now TSMC has reached its goal ahead of schedule.

In addition, TSMC is working with a number of companies to outsource some of its packaging orders, which could boost capacity by 20%. These include Sun Micron (ASE) and United Microelectronics (UMC) both received orders in September, playing a key role in NVIDIA's packaging supply chain. NVIDIA is planning to diversify its packaging supply chain, has contacted Sun Micron and UMC to provide the relevant technology, as TSMC's backup to alleviate some of the pressure.