Well, NVIDIA had recently announced the first successful production of Blackwell chip wafers on American soil, but there's still an element of the AI supply chain that is yet to be brought in.
NVIDIA & Partners Are Still Reliant On Off-Shore Fabs For Advanced Packaging Services
For those unaware, NVIDIA's CEO Jensen Huang unveiled the first Blackwell chip wafer made in the US a few days ago at TSMC Arizona, and it was indeed a massive achievement for the 'Made in USA' narrative. However, there's still a key part of the AI supply chain that isn't with the US for now, which is why the first Blackwell wafer produced would likely be needed to fly back to Taiwan to get the AI chips carved out of the wafer successfully. If you still haven't guessed what we are talking about, it's the lack of advanced packaging services in America, such as TSMC's CoWoS.
Advanced packaging has played a vital role in the semiconductor industry with the advent of the AI frenzy, and in this case, in particular, the Blackwell chip wafer being held by Jensen himself is a rather 'unrefined' piece of silicon. In a usual process, the wafer will be sliced into multiple dies, with each die being connected and mounted onto a substrate, and then interconnected using technologies like TSMC's CoWoS or Intel's EMIB. Packaging is a crucial part of scaling up the performance of AI chips, since it basically stacking and integrating dies with short interconnects.
The U.S. still lacks sufficient advanced packaging services, which is why firms like TSMC need to send wafers being produced in America to locations like Taiwan, where they are then processed and integrated with packaging technologies. The 'back-end' of the AI chip supply chain isn't sufficiently available in the US at all, which produces a constraint for manufacturers in the nation, as well as adding extra costs to the end product, or in this case, the Blackwell AI chips. However, the industry has recognized the problem, and here's how it is being mitigated.
TSMC has already announced plans to develop advanced packaging services in the US, as a part of its multi-billion dollar investment in the region, but setting up such facilities could take years, since work has to be done from 'ground zero'. However, the Taiwan giant has plans to collaborate with Amkor, which is an American product packaging and test services provider, to speed up the process of bringing technologies like CoWoS into the US. The goal here is to contract turnkey advanced packaging and test services from Amkor to ensure a quick time-to-market process.
The US has recognized the need to have a sufficient supply chain, covering both front-end and back-end elements, and with the investments from the likes of TSMC, the process has sped up massively, to the point where America is producing one of the world's most powerful AI chips domestically.
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