Expanding Foundry Biz
TSMC, the No. 1 global foundry player, is reportedly unable to meet Nvidia’s demand for artificial intelligence (AI) chip packaging. As demand for AI chips continues to explode, it remains to be seen if Samsung Electronics, considered the most technologically advanced player among latecomers, will expand its foundry business.
TSMC reportedly said that its semiconductor packaging service supply was not keeping up with demand for AI chips, according to industry sources and foreign media outlets on Aug. 7.
“Samsung has an opportunity,” said a researcher at Korea Investment & Securities. TSMC’s packaging capacity will not be able to keep up with growing demand for AI chips, weakening TSMC’s competitiveness that it has emphasized to foundry clients, the researcher explained. Industry insiders believe that TSMC has maintained its dominance in the foundry industry to date because it has been able to satisfy its clients with integrated services that provide not only advanced chip technology which produce 7 nm or more advanced chips but its cutting-edge packaging technology. However, as TSMC’s supply of AI chip packaging has reached its limits, customers have begun to feel dissatisfaction with TSMC’s services. This is true for major AI chipmakers, in particular Nvidia.
TSMC has been attracting chipmakers with its chip on wafer on substrate (CoWoS) technology. CoWoS is TSMC’s brand name for its 2.5-dimensional (2D) package technology. Some of the most demanded chips in the AI industry today are implemented through this packaging technology. Nvidia’s products are built with a GPU at the center of a board and SK hynix’s high-bandwidth memory (HBM) on the edges of the board.
Some analysts said that CoWoS services, which TSMC cannot provide, will be provided by ASE or Amkor, two of TSMC’s longtime and rear-end process-specialized partners. But given the technical difficulty of CoWoS, their yields may not be as high as expected.
In the end, Samsung is highly likely to fill the void left by TSMC and provide high-performance computing (HPC) related packaging technology for AI chips, analysts say. If Samsung Electronics is successful in providing a turnkey solution for HBM-2.5D packaging, the Korean semiconductor giant will be able to land much more chip production orders from AI chip leaders such as Nvidia.
Samsung Electronics has been announcing a flurry of packaging technologies lately in an effort to dethrone TSMC in the foundry domain. Currently, the company can offer its customers H-cube (2.5D technology) packaging technology for HBM and computational function chips. In April, its foundry division said it will launch a packaging turnkey service in order to make it as easy as possible for designers to make chips.