NVIDIA secures substantial CoWoS advanced packaging supply from Intel for upcoming AI GPU production.

CoWoS advanced packaging has become critical to AI infrastructure development, particularly for creating AI accelerators like NVIDIA's H100s. As generative AI demand surged, GPU manufacturers rushed towards "pushing out" AI-focused products at maximum capacity, intensifying demand for CoWoS packaging. NVIDIA faces an "immense" advanced packaging requirement, with TSMC and others facing significant supply bottlenecks.

NVIDIA, which leads data center revenue, is diversifying its supply chain to secure adequate packaging volumes for both current and future products. According to Taiwan Economic Daily, Intel has obtained a portion of CoWoS supply, with reports indicating approximately 5,000 wafers per month. This addition from Intel would result in NVIDIA experiencing a 10% rise in CoWoS volumes—a significant milestone as the company prepares for next-generation products such as the Hopper H200 AI GPUs, with demand expected to increase further.

TSMC, meanwhile, has expressed confidence in its CoWoS supply trajectory. The company has shown optimism that monthly CoWoS output could reach 32,000 units by the end of 2024, with potential expansion to 44,000 units by the end of next year. TSMC is actively upgrading its existing facilities to ensure streamlined packaging supply without the disruptions witnessed in the past.

The outlook suggests that the future will not witness an AI equipment shortage similar to that seen in 2023, as crucial components including HBM and CoWoS have reached optimal production levels, hopefully enough to cater to the upcoming demand. However, nothing is certain yet, and outcomes could differ from current expectations.