Last week, Jensen Huang, CEO of NVIDIA, visited Taiwan and met with high-ranking officials from Taiwanese partners, including Wei Zhe Zha, CEO of TSMC. They reportedly focused on seeking technological collaboration for NVIDIA's artificial intelligence (AI) accelerator new product, the Blackwell series, and the next-generation Rubin platform. Discussions also took place on next-generation advanced packaging technology (CoWoS-L) necessary for AI accelerator manufacturing, as well as processes that are nearing commercialization, such as silicon photonics, referred to as 'optical semiconductors.'
According to local media, including the Taiwan Economic Daily, CEO Huang discussed next-generation technological processes, including advanced packaging, with CEO Wei Zhe Zha last week. TSMC is expected to expand the application of the CoWoS-L process for manufacturing NVIDIA's next-generation AI accelerators. CoWoS is a packaging process that stacks graphics processing units (GPUs) and high-bandwidth memory (HBM) chips on a single substrate to enhance processing capability while reducing space and increasing power efficiency. TSMC is set to provide the CoWoS-L process, which improves process efficiency, to NVIDIA alongside the previous generation, CoWoS-S.
NVIDIA, which dominates the AI accelerator market, releases new products every year with improved performance. With each new product, not only does performance rise, but the complexity of the processes also increases, making collaboration with TSMC, which provides packaging processes for advanced microprocessing and final product forms, more critical within the manufacturing ecosystem in Taiwan. The CoWoS-L, expected to begin mass production in the second half of this year, is projected to be applied to NVIDIA's next-generation products, such as the GB300.
Some have raised concerns that NVIDIA's next-generation AI accelerator, the Blackwell series, is experiencing heat issues, which could disrupt TSMC's plans for mass production, including advanced packaging processes. Reports indicated that overheating occurred in the first shipment batch of server racks equipped with Blackwell chips, causing delays and cancellations for some orders due to issues with chip consolidation. However, CEO Huang dismissed the controversy, stating, "It is not about reducing demand for TSMC's CoWoS but rather needing to increase production capacity."
TSMC is reportedly also considering building two additional advanced packaging plants as part of its ongoing facility investments to meet rising demand. CEO Wei Zhe Zha noted, "Orders related to high-performance computing (HPC), including those from NVIDIA, have been more than expected, leading to significant expenditures for building advanced packaging plants." The Taiwan Economic Daily reported that two new advanced packaging plants are planned, with an estimated investment exceeding 200 billion yuan (about 39.688 trillion won), stating that the total number of factories will increase to eight in the short term, including the new advanced packaging fabs.
Discussions are also believed to have taken place regarding next-generation technologies nearing commercialization, such as silicon photonics, in addition to processes for manufacturing chips. Silicon photonics is a technology that implements the basic semiconductor signal transmission method from electrical to electronic and optical. It is faster than the traditional method where data moves through metals like copper. Samsung Electronics and Intel are also preparing to adopt this technology.
TSMC is reportedly planning to adopt related technologies for the GB300 chip, which NVIDIA is set to launch this year, and the next-generation Rubin platform. An industry insider stated that the technology is effective not only for data transmission speeds but also in preventing signal interference and chip overheating issues, noting that both NVIDIA and Broadcom are eyeing semiconductor manufacturing utilizing related technologies.
Meanwhile, CEO Huang has been reported to have visited NVIDIA's Beijing office after concluding his schedule in Taiwan. He was initially expected to attend President Trump's inauguration alongside Apple CEO Tim Cook, Amazon founder Jeff Bezos, and Tesla CEO Elon Musk. However, according to local Chinese media, CEO Huang stated during his visit, "It has been 25 years since NVIDIA entered the Chinese market, contributing to the modernization of one of the greatest markets and nations in the world."