[News] TSMC to Expedite Production of NVIDIA’s Specialized Chips for China

2023-12-15 Semiconductors editor

According to a news report from IJIWEI, sources have revealed that NVIDIA has placed urgent orders with TSMC for the production of AI GPU destined for China. These orders fall under the category of “Super Hot Run” (SHR), with plans to commence fulfillment in the first quarter of 2024.

Respond to the United States implementing stricter export controls on the Chinese semiconductor industry, sources stated in the report indicate that NVIDIA plans to provide a new “specialized” AI chip to China by lowering specifications, replacing the export-restricted H800, A800, and L40S series.

Insiders suggest that NVIDIA intends to resume supplying the RTX 4090 chip to China in January of next year but also release a modified version later to comply with U.S. export restrictions. 

On the other hand, NVIDIA continues to increase its orders with TSMC. This move aims to secure TSMC’s manufacturing capacity to meet the demand for the H100. However, due to limitations in CoWoS (Chip-on-Wafer-on-Substrate) production capacity, the H100 GPU is currently facing severe shortages.

It is noted that following NVIDIA, Intel and AMD are also expected to tailor AI chips for China. TSMC, as the primary pure-play foundry partner for these AI chip suppliers, will continue to enjoy a competitive advantage.

According to sources from semiconductor equipment manufacturers, despite TSMC’s efforts to increase CoWoS production capacity, the foundry still cannot meet the growing demand for NVIDIA GPUs. Additionally, the MI300 chip that was recently launched by AMD is also competing for the foundry industry’s production capacity.

Insiders note that TSMC’s ability to expand CoWoS production capacity is limited, with delays in equipment replacement speed, machine installation speed, and labor deployment. The new capacity is expected to be ready by the second quarter of 2024.

Equipment is identified as one of the key variables affecting TSMC’s expansion of CoWoS production capacity. Unexpected impacts on production and delivery times from Japanese equipment supplier Shibaura have delayed the development and installation of new capacity across TSMC’s production lines, including those in Longtan and Zhunan.

TSMC Chairman Mark Liu mentioned in a press conference in September that the shortage of CoWoS packaging capacity at TSMC is temporary, and it will be addressed through capacity expansion within the next year and a half to meet the growing demand.

(Photo credit: TSMC)

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Please note that this article cites information from IJIWEI.