TSMC Prediction: AI Chip Supply Shortage to Last ~18 Months

[T0@st]

TSMC Chairman Mark Liu was asked to comment on all things artificial intelligence-related at the SEMICON Taiwan 2023 industry event. According to a Nikkei Asia report, he foresees supply constraints lasting until the tail end of 2024: "It's not the shortage of AI chips. It's the shortage of our chip-on-wafer-on-substrate (COWOS) capacity...Currently, we can't fulfill 100% of our customers' needs, but we try to support about 80%. We think this is a temporary phenomenon. After our expansion of advanced chip packaging capacity, it should be alleviated in one and a half years." He cites a recent and very "sudden" spike in demand for COWOS, with numbers tripling within the span of a year. Market leader NVIDIA relies on TSMC's advanced packaging system—most notably with the production of highly-prized A100 and H100 series Tensor Core compute GPUs.

These issues are deemed a "temporary" problem—it could take around 18 months to eliminate production output "bottlenecks." TSMC is racing to bolster its native activities with new facilities—plans for a new $2.9 billion advanced chip packaging plant (in Miaoli County) were disclosed during summer time. Liu reckons that industry-wide innovation is necessary to meet growing demand through new methods to "connect, package and stack chips." Liu elaborated: "We are now putting together many chips into a tightly integrated massive interconnect system. This is a paradigm shift in semiconductor technology integration." The TSMC boss reckons that processing units fielding over one trillion transistors are viable within the next decade: "it's through packaging with multiple chips that this could be possible.".



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[Wye]

The bubble will pop way before that, and the investments in increased capacity will be wasted.

 

[Wirko]

If Nvidia is getting fewer cowos than they are demanding, how many cowos is AMD getting for their MI300?

 

[mechtech]

meh

how long will the vehicle chip shortage last? That's what I care about...........

 

[Dimitriman]

Seriously, all the chip makers can go intercourse themselves with another manufactured "shortage" for profits. The economy won't be able to support it this time and I am going to admire watching it fall apart.

 

[watzupken]

A lot of companies including Nvidia said the same about shortages due to cryptomining and we knew what happened. Delays, bottlenecks, supply chain disruptions, etc, are just narratives to make people try and get worried and go add to the demand.

 

[Prima.Vera]

This is what happens when you have monopoly of just 1 manufacturer.
Intel better start justifying all those billions in RND and tax deductions for their fabs, since obviously, they can no longer compete.
Same for Samsung, who was given billions of Korean public money and tax cuts...

 

[HisDivineOrder]

So they can't even make all the AI variants they want. Imagine how few GPU's (and how expensive the ones they do make will be) once they get every AI chip they want, made.

Hopefully, a company will come along with a purpose-built solution that's superior and more cost effective to drive Nvidia out and back home to gaming.