TSMC's CoWoS and other advanced packaging solutions might witness massive production slowdowns, as a key Japanese supplier is cutting production of a vital essential.
TSMC's CoWoS & Other Advanced Packaging Solutions Could See a Disruption In Production, As Demand Reaches a New High
TSMC's CoWoS packaging has been an integral part in developing capable AI hardware such as accelerators from NVIDIA, given that through it, companies have managed to bring in performance in prominent figures by stacking multiple chiplets. However, it is rumored that the AI supply chain might lead to exhaustion, as advanced packaging production could see a compromise. According to Taiwan Economic Daily, the Japanese firm Asahi KASEI, which provides photosensitive polyimide (PSPI) for advanced packaging technologies, is set to cut its supply to cater to the massive demand from them.
It is claimed that Asahi KASEI will now prioritize the supply of PSPI to clients, as the current supply isn't enough to meet the entire demand. The Japanese firm is said to be an integral part of the AI supply chain, responsible for an important part of technologies like CoWoS. Given that the firm cuts off its supply, this means that the markets could see a noticeable delay in the supply chain, which could potentially force companies like NVIDIA to revise quotations or even delay production schedules even further.
Now, the major question is whether this supply cut-off would affect TSMC and its CoWoS technology? Well, Asahi is said to be one of TSMC's most important suppliers, and both parties have deepened cooperation over the years so that the Japanese firm might prioritize fullfill orders coming from the Taiwan giant. As for other advanced packaging firms like ASE Technology, Samsung, or Intel, they could very well experience disruptions, and while they are not a part of the mainstream supply chain, this could still lead to delays for several AI products.
NVIDIA's CEO, Jensen Huang, has claimed in the past that there was no alternative to TSMC's CoWoS and that the company is totally reliant on the Taiwan giant. This indicates that NVIDIA has no plans to switch to another partner. With such high demand on its hands, it will be interesting to see how TSMC sorts out supply chain disruptions.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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