AI Chip Race: Nvidia, AMD Secure TSMC Deal

The artificial intelligence market is heating up, and as key hardware providers, Nvidia and AMD are both strategizing to increase their shipments. Media reports indicate that these two companies have secured TSMC’s advanced packaging capacities in CoWoS and SoIC for 2024 and 2025, aiming to capture a larger share of the AI market.

TSMC is highly optimistic about the potential for growth in the AI sector. In April, during an earnings call, CEO C.C. Wei revised the company’s forecast for AI-related orders, extending their visibility from 2027 to 2028. TSMC also anticipates that this year’s revenue from AI processors for servers will more than double, with an annual compound growth rate of 50% over the next five years; by 2028, revenue from AI-related processor orders is expected to exceed 20% of the company’s total revenue.

The global AI market is fiercely competitive, with major corporations such as Amazon, Microsoft, Google, and Meta aggressively advancing related projects. This has led to a high demand for Nvidia and AMD’s chips, which are primarily manufactured by TSMC, thus highlighting the critical need for TSMC’s advanced processes and packaging capabilities. TSMC is actively expanding its advanced packaging capacities, and industry estimates suggest that TSMC’s monthly output of CoWoS packaging could reach between 45,000 and 50,000 units by the end of this year, approximately doubling from 15,000 units in 2023, and stabilizing at 50,000 units per month by the end of 2025. As for SoIC, it is expected that by the end of this year, the monthly output could reach 5,000 to 6,000 units, a multiple increase from 2023’s output, with further growth to 10,000 units per month by the end of 2025.