The current tech landscape is abuzz with the relentless rise of AI applications, and this surge has led to an ever-increasing demand for AI-specific chips. During the SEMICON Taiwan 2023 event, TSMC issued a noteworthy warning, indicating that the shortage of AI chips may persist for at least the next 18 months.
According to reports from Nikkei Asia, Mark Liu, TSMC’s Chairman, shed light on the looming supply challenge, clarifying that the shortage isn’t due to a deficiency of AI chips per se but rather a shortfall in the production capacity of chip on-wafer-on-substrate (COWOS) technology. TSMC candidly concedes that they won’t be able to meet the full demand of their customers but are committed to supplying at least 80%.
What’s particularly striking is the sudden and substantial spike in demand for COWOS chips, which has tripled within just a year. Nevertheless, the supply hiccup is expected to be temporary, with prospects for resolution within the next 18 months.
TSMC is taking proactive measures to tackle this challenge, intensifying its local operations and investing a significant $2.9 billion in a state-of-the-art chip packaging facility. Furthermore, they underscore the urgency of industry-wide innovation to address the surging chip demand, suggesting novel methods for “connecting, packaging, and stacking chips.”
In essence, TSMC’s warning revolves around the possibility of protracted AI chip shortages, primarily due to constraints in COWOS chip production capacity. While these challenges are likely to persist for approximately 18 months, TSMC is actively working to enhance capacity and advocating for innovative solutions across the industry to meet the ever-expanding demand for these pivotal components.
