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TSMC is reportedly facing massive demand for its advanced packaging services, primarily due to its extensive use in AI chips from NVIDIA and other manufacturers.
**TSMC Is Forced To Schedule Production By Up To One Year Earlier, Creating Huge Pressure On The Supply Chain**
TSMC, one of the leading suppliers for advanced packaging technologies like CoWoS, alongside ASE Technology, has a significant share of the market. However, the demand is so high that TSMC cannot keep up with customer demands alone. According to comments by TSMC’s Vice GM of Advanced Packaging Technology (via TED), the company must accelerate its product roadmap to match AI roadmaps from NVIDIA and others.
Deploying packaging production lines in a ‘sequential’ manner is no longer feasible as customers are forcing TSMC to speed up the process by more than three quarters, and in some cases, even a year. To future-proof itself, TSMC is ordering required equipment ahead of schedule and has partnered with local suppliers. They have also formed an alliance called “3DIC Advanced Packaging Manufacturing Alliance,” which includes TSMC, ASE, and several firms.
The demand for technologies like CoWoS and SoIC is immense because AI GPU manufacturers operate at a six-month to one-year product cadence. For example, NVIDIA’s Rubin is set to debut after Blackwell Ultra mass production just six months later. Given the significant architectural differences between the two lineups, TSMC and other suppliers need to adjust accordingly.
The pressure on the advanced packaging industry requires diversification within the supply chain. Currently, Taiwan dominates all packaging services. While TSMC has plans to open a facility in the US (as reported), for now, Taiwanese suppliers have geared up to collaborate and meet the gigantic demand.
