As supply chain costs rise, AI chips made by TSMC may become more expensive
While the semiconductor industry languishes in a collective trough, the realm of artificial intelligence (AI) paints a markedly different tableau. NVIDIA’s data center GPUs have reaped a surfeit of orders, and coupled with exigent demands from other tech behemoths, this has set Taiwan Semiconductor Manufacturing Company (TSMC) on a veritable whirlwind of activity, exacerbating the strain on advanced packaging capacities.
At present, the linchpin impeding TSMC’s timely deliveries lies in the packaging capacity requisite for these AI chips. In the absence of packaging, the mere existence of the chip remains an incomplete equation. To this end, TSMC is fervently striving to strike a harmonious balance between chip fabrication and packaging capacities to ensure punctual product deliveries to its clientele. According to the UDN, as TSMC ardently augments its advanced packaging capacity, the scale of its supply chain is burgeoning concomitantly. A resultant uptick in pricing among certain intermediaries is manifesting, portending a probable escalation in TSMC’s AI chip production costs, making the end product a pricier proposition.
Confronted with the robust demand for AI products, TSMC has funneled tens of billions of dollars into bolstering its packaging capacity. For instance, in July of this very year, TSMC heralded an investment of $2.89 billion towards the erection of a new packaging and testing facility in Taiwan. It is TSMC’s aspiration that by the latter half of 2024, they can elevate their packaging capacity to 30,000 wafers per month, thereby alleviating the pressures born from a dearth in advanced packaging capacity.
Furthermore, TSMC has procured the intermediary layers essential for CoWoS packaging from United Microelectronics Corporation (UMC), having already received the inaugural batch of orders. Given TSMC’s pressing endeavor to fulfill a deluge of AI chip orders before the fiscal year’s curtain falls, UMC has charted plans to double the capacity of its Singaporean facility, escalating from 3,000 wafers per month to a staggering 6,000.
