NVIDIA And AMD Just Bought Up All Excess Capacity At TSMC For Next Generation GPUs And CPUs
While the Coronavirus has the business world reeling, NVIDIA and AMD have both swooped in and purchased excess capacity at TSMC by ramping up their orders for next-generation GPUs and CPUs. In a report published by Digitimes, Taiwan's most reliable news source, TSMC is expected to post strong results in 1H 2020 thanks to a sudden ramp-up of orders by NVIDIA and AMD making up for the shortfall.
NVIDIA and AMD gobble up spare (7nm) capacity at TSMC for next-generation processors
The last flagship release from NVIDIA was back in September 2018. It has been a long time since NVIDIA rolled out a successor and we have a feeling that the company was waiting for TSMC's 7nm node to get mature for high-performance graphics and you are going to see a massive leap with the company's next-generation architecture.
Since both NVIDIA and AMD are fab-less design houses there is always a concern whether TSMC can spare capacity (everyone knows Apple is their darling) but it looks like the COVID19 has swung things in their favor as both companies have been gobbling up space yielded by other customers. This includes next-generation CPUs and GPUs from both NVIDIA and AMD.
While most of the report is hidden behind a paywall, the big takeaway is given here:
"A ramp-up in short lead-time orders placed by AMD and Nvidia will allow TSMC to post relatively strong results compared to other foundries in the first half of 2020, according to industry sources." -Digitimes, Apr. 23, 2020.
Apple already intended to move to 5nm in 2H 2020, freeing up space for companies like AMD. In fact, AMD was on track to become TSMC's largest 7nm customer by 2H 2020. Secondly, TSMC is also adding further capacity to its facilities so AMD will not only be getting the Apple leftovers, the COVID leftovers but even more wafers.
Right now, HiSilicon and Qualcomm are both above AMD, but the company is set to become TSMC's largest 7nm customer by 2H 2020, dethroning Qualcomm, and HiSilicon. AMD recently booked an order of 30,000 wafers in one single "swoop" that accounted for 21% of the total capacity at TSMC at that time. Capacity at TSMC has been fully booked since the start of the year, and any spare capacity was created due to the impact of the coronavirus.
At the same time, NVIDIA has taken a lot of the capacity at TSMC as well which is indicative of the ramp-up to launch that the company is preparing for its next-generation Ampere series (or whatever NVIDIA decides to call them) of graphics cards. In fact, we have it on good authority that the company planned to introduce a server GPU at the ill-fated GTC conference (which explains why NVIDIA tried so hard to salvage it in any form).
That said, we have also head before from pretty reliable sources that NVIDIA is waiting to see AMD's Big Navi before rolling out its RTX 3000 series graphics cards (aka Ampere GPU) in order to be better positioned. AMD's Big Navi is planned to be released this year and the expected release date initially was at Computex 2020. With Computex postponed to September 2020, we can only hope that things will clear up by that time ( I am referring to COVID) so these companies can move forward with their schedules.
That said, it looks like both AMD and NVIDIA are silently building up their inventories of CPU and GPU silicon to make sure that when the time comes, they are able to meet demand in full - which is one silver lining of production space being freed up at TSMC. COVID or no COVID, these companies will eventually have to get their schedules on track soon enough and we expect them to be completely prepared at launch. While AMD has already admitted to COVID having disrupted some of the Renoir supply schedule, we are also prety sure that this will not be much of an issue going forward as pretty much all three of our Silicon Triumvirate (Intel-Nvidia-AMD) are insulated against COVID 19.