High Demand for Advanced Packaging Forces TSMC to Accelerate Production Schedules

Amid a surge in demand for advanced packaging services, TSMC has become a focal point, particularly due to its crucial role in manufacturing AI chips for leading companies like NVIDIA.

TSMC Faces Unprecedented Demand, Accelerates Production Scheduling

Renowned as a top supplier of advanced packaging technologies such as CoWoS and in competition with others like ASE Technology, TSMC has been significantly affected by rising customer demands. The company’s Vice General Manager of Advanced Packaging Technology has indicated that to align with AI roadmaps from NVIDIA and other industry players, TSMC must accelerate its packaging product roadmap.

The request from clients has necessitated a strategic shift for TSMC. Traditional methods of sequentially deploying packaging production lines are no longer viable, with some customers pressing for timelines that are up to a year shorter than usual. In response, TSMC is proactively ‘future-proofing’ its operations by ordering essential equipment in advance. Moreover, the company has formed an alliance known as the “3DIC Advanced Packaging Manufacturing Alliance, ”collaborating with local packaging providers, including ASE and other firms.

SEMI 3DIC Advanced Manufacturing Alliance Kick-off Ceremony with participants holding branded signs like “TSMC” and “TEL”. — Image Credits: CNA

The demand for innovative technologies such as CoWoS and SoIC has skyrocketed, driven mainly by AI GPU manufacturers like NVIDIA, which follow a rigorous six-month to one-year product release schedule. This necessitates that suppliers, including TSMC, prepare their production lines well in advance. For instance, NVIDIA’s upcoming Rubin is poised to be launched shortly after the mass production of Blackwell Ultra, highlighting the architectural complexities that require rapid adjustments from TSMC and its peers.

Given the mounting pressure within the advanced packaging sector, diversifying the supply chain is essential. Currently, Taiwan remains the leading hub for packaging services. While TSMC plans to establish a facility in the United States in the future, Taiwanese suppliers appear well-prepared to collaborate and address the soaring demand in the interim.

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