Nvidia Continues Strong Demand for Taiwan Semiconductor's Advanced Packaging Despite Technology Shifts

Nvidia Corp’s NVDA demand for advanced packaging from Taiwan Semiconductor Manufacturing Co TSM remains robust despite its evolving technology requirements, Reuters cites Nvidia chief Jensen Huang in response to its order cut plans.

Huang voiced plans to employ Chip-On-Wafer-On-Substrate-L (CoWoS-L) for its Blackwell transition and gradually ramp up capacity into the technology despite depending on CowoS-S for its Hopper artificial intelligence (AI) chip.

For context, Nvidia has relied mainly on CoWoS-S to combine its AI chips.

Nvidia’s Blackwell AI chip leverages Taiwan Semiconductor’s CoWoS advanced packaging technology.

Also Read: Taiwan Semiconductor Q4 Earnings: 3nm and 5nm Nodes Lead Topline Growth, Expands Margins, Issues Strong Q1 Outlook

Recently, TF International Securities analyst Ming-Chi Kuo and the Taiwan media flagged Nvidia’s shift to CoWoS-L, which is likely affecting the Taiwanese chipmaker’s CowoS-S revenue.

Due to capacity constraints, packaging has remained a bottleneck for the Blackwell chips, prompting Nvidia to employ Fan-Out Panel Level Packaging (FOPLP) technology for its GB200 AI server chips.

Still, Huang said that the advanced packaging capacity was “probably four times” the amount available less than two years ago.

Prior reports indicated Taiwan Semiconductor will likely double its CoWoS production capacity in 2025, with Nvidia likely to occupy over 50% of the capacity.

Despite Taiwan Semiconductor’s efforts to ramp up production, the demand for advanced packaging continues to exceed supply, prompting it to double its CoWoS production capacity by 2025.

Price Actions: At last check on Thursday, NVDA stock was down 1.52% to $134.18. TSM is up 4.99%.

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