[News] Three Factors Hints Advanced Packaging Capacity Shortage May End Early

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The shortage of advanced packaging production capacity is anticipated to end earlier than expected. Industry suggests that Samsung’s inclusion in providing HBM3 production capacity has led to an increased supply of memory essential for advanced packaging. Coupled with TSMC’s strategy of enhancing advanced packaging production capacity through equipment modifications and partial outsourcing, and the adjustments made by some CSP in designs and placing orders, the bottleneck in advanced packaging capacity is poised to open up as early as the first quarter of the upcoming year, surpassing industry predictions by one quarter to half a year, according to the UDN News.

TSMC refrains from commenting on market speculations, while Samsung has already issued a press release signaling the expansion of HBM3 product sales to meet the growing demand for the new interface, concurrently boosting the share of advanced processes.

Industry indicates that the previous global shortage of AI chips primarily resulted from inadequate advanced packaging capacity. Now the shortage in advanced packaging capacity is expected to end sooner, it implies a positive shift in the supply of AI chips.

Samsung, alongside Micron and SK Hynix, is a key partner for TSMC in advanced packaging. In a recent press release, Samsung underscores its close collaboration with TSMC in previous generations and the current high-bandwidth memory (HBM) technology, supporting the compatibility of the CoWoS process and the interconnectivity of HBM. Having joined the TSMC OIP 3DFabric Alliance in 2022, Samsung is set to broaden its scope of work and provide solutions for future generations of HBM.

Previously, the industry points out that the earlier shortage of AI chips stemmed from three main factors: insufficient advanced packaging capacity, tight HBM3 memory capacity, and some CSPs repeatedly placing orders. Now, the obstacles related to these factors are gradually being overcome. In addition to TSMC and Samsung’s commitment to increasing advanced packaging capacity, CSPs are adjusting designs, reducing the usage of advanced packaging, and canceling previous repeated orders – all of which are the key factors.

TSMC’s ongoing collaboration with OSATs(Outsourced Semiconductor Assembly And Test) to expedite WoS capacity expansion is gaining momentum. NVIDIA confirmed during a recent financial calls that it has certified other CoWoS advanced packaging suppliers’ capacity as a backup. Industry speculation suggests that certifying the capacity of other CoWoS suppliers for both part of the front-end and back-end production will contribute to TSMC and its partners achieving the target of reaching a monthly CoWoS capacity of approximately 40,000 pieces in the first quarter of the next year.

Furthermore, previous challenges in expanding advanced packaging production capacity, especially in obtaining overseas equipment, are gradually being overcome. With equipment optimization, more capacity is being extracted, alleviating the shortage of AI chip capacity.

(Image: Samsung)

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