The Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly increased its orders for machines needed for Chip on Wafer on Substrate (CoWoS) packaging by 30% to keep up with the rising demand for artificial intelligence (AI) chips, according to a report from Taiwan Economic Daily on Tuesday. The company's clients, including Amazon (NASDAQ:AMZN), AMD, Broadcom (NASDAQ:AVGO), and Nvidia (NASDAQ:NVDA), are placing rush orders for AI chips to meet the growing usage of Generative AI models such as Bard, ChatGPT, and Dall-E.
On Monday, it was reported that TSMC's CoWoS chip packaging technology was expected to lead to an increase in AI chip prices in the coming months due to strong interest from large American technology firms. This demand provided TSMC with much-needed orders during the ongoing downturn in the semiconductor industry.
With the current number of CoWoS packaging machines, TSMC reportedly manufactures around 12,000 wafers monthly. However, due to the rising demand, TSMC increased its machine orders in May this year to boost its production capacity to about 15,000 to 20,000 wafers per month. With the additional 30% order increase this week, the company is expected to manufacture around 30,000 wafers per month by Q2 2024.
TSMC has reportedly approached several local companies, including AllRing-Tech, E&R Engineering Corporation, Grand Process Technology, Group Up Industrial, and Scientech Corporation, to procure additional CoWoS packaging machines. The machines ordered in May are expected to be installed by Q1 2024 and those ordered this week by Q2 2024.
In July, TSMC announced a $2.89 billion investment into a new chip packaging facility in Taiwan. This investment is part of TSMC's effort to upgrade its packaging capacity due to the strong demand for AI products.
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