TSMC: Nvidia Blackwell chip orders account for more than 70% of CoWoS-L packaging capacity in Q1 2024

TSMC is optimistic about advanced packaging orders. TSMC Chairman Wei Zhejia publicly stated at the January earnings conference that it is continuing to expand advanced packaging capacity to meet customer demand. According to TSMC statistics, advanced packaging revenue will account for about 8% in 2024, and will exceed 10% this year, and the goal is to exceed the company's average gross profit margin.

The supply chain revealed that after NVIDIA's Blackwell architecture goes into mass production, it will gradually stop production of the previous generation Hopper architecture H100/H200 chips, and the generational change will take place in the middle of this year.

Legal persons explained that although NVIDIA's Blackwell architecture chips are still produced using TSMC's 4nm process, they are developed into B200/B300 for high-speed computing (HPC) and RTX50 series for consumer use. In B200/B300, they are beginning to use CoWoS-L advanced packaging that combines a redistribution layer (RDL) and a partial silicon interposer (LSI).

CoWoS-L advanced packaging not only expands the chip size and area and increases the number of transistors, but also allows for the stacking of more high-bandwidth memory (HBM) to upgrade high-speed computing performance. In terms of performance, yield, and cost, it is superior to the previous CoWoS-S and CoWoS-R advanced packaging technologies, becoming the main selling point of B200/B300. For this reason, Nvidia has aggressively grabbed TSMC's huge CoWoS-L advanced packaging production capacity this year.

The new CoWoS production capacity expanded by TSMC this year is gradually being opened up. It is expected that the Blackwell architecture chips mass-produced for Nvidia will grow rapidly at a rate of more than 20% per quarter this year. In total, Nvidia has accounted for more than 70% of TSMC's CoWoS-L production capacity, and the annual shipments are expected to exceed 2 million.

In addition, due to its limited production capacity, TSMC has outsourced the WoS (Wafer on Substrate) capacity of CoWoS advanced packaging. Not only has ASE Technology Holding Co., Ltd. taken a large number of advanced packaging and testing orders, but King Yuan Electronics has also won a large number of front-end wafer testing (CP) and back-end wafer final testing (FT) orders from high-speed computing customers, filling up King Yuan Electronics' existing production capacity.