In a bid to meet demand for compute GPUs and other processors used for artificial intelligence (AI) and high-performance computing (HPC), TSMC recently placed orders for additional tools used for chip-on-wafer-on-substrate (CoWoS) packaging, as indicated in the most recent earnings call. The company seems to be particularly optimistic about demand for AMD's upcoming Instinct MI300-series datacenter APUs and GPUs, DigiTimes reports.
To expand its CoWoS capacity, TSMC recently placed new orders with advanced packaging equipment suppliers including Apic Yamada, Disco, Gudeng Precision Industrial, and Scientech, according to DigiTimes. Lead time for such tools is currently less than six month, according to China Renaissance Securities .
This ongoing expansion has been triggered by the upcoming mass production of AMD's MI300 series and the persistent shortage of chip-on-wafer-on-substrate (CoWoS) packaging capacity, exacerbated by Nvidia's demands. DigiTimes goes as far as citing industry sources to say that when AMD's MI300-series enters mass production, the volume of TSMC's shipments for this CoWoS-based product, will be equivalent to half of Nvidia's total in a single quarter.
This essentially suggests that demand for AMD's next-generation compute GPU will be half of what Nvidia ships, which is a very optimistic expectation as today Nvidia commands over 90% of compute GPU market due to dominance of its CUDA software stack among AI and HPC developers.
AMD's shares experienced a 4% uptick in after-hours trading on Tuesday, following the company's announcement of 'very high' customer interest in its soon-to-be-launched Instinct MI300-series APU and GPU, which is set to enter production in the fourth quarter. However, the stock declined by approximately 6% on Wednesday, as analysts expressed doubts over the chip designer's AI escalation goals, deeming them potentially overly optimistic, Reuters reports.
"Unless numbers get really material, soon, we fear estimates remain too high and the AMD stock looks a little stretched to us," Bernstein analysts wrote in a note, according to Reuters .
In addition to AMD and Nvidia, Amazon, Broadcom, and Xilinx use CoWoS packaging for their datacenter offerings.
