TSMC has received big news.
According to the latest news from the Taiwan Economic Daily, TSMC will increase its investment in the new advanced packaging plant in Chiayi Science Park in Taiwan, China, China, with a total investment of more than NT $500 billion (about NT $113.7 billion), mainly to expand the advanced packaging capacity of wafer based chips (CoWoS). With the booming development of artificial intelligence (AI), the global demand for advanced semiconductor packaging has surged, and some equipment manufacturers have exclaimed, "We work overtime every day, orders are exploding!"
While vigorously expanding production, TSMC also plans to introduce advanced CoWoS packaging technology to Japan. According to the latest Reuters report, informed sources have revealed that TSMC is considering introducing its advanced CoWoS packaging technology to Japan.
In addition, Apple's latest move in the AI field has suddenly ignited the market. According to insiders, Apple is negotiating to implant Google's Gemini artificial intelligence engine into the iPhone, laying the foundation for a major agreement that will shake the artificial intelligence industry. Stimulated by this news, AI smartphone concept stocks in A-shares surged collectively this afternoon. As of the close, Siquan New Materials rose more than 14%, Yunzhong Technology and Shengyi Electronics rose more than 12%, Xianying Technology rose more than 11%, and Furong Technology, Yingtong Communication, Kechuan Technology, Chaoyang Technology and others rose to the limit.
TSMC's heavyweight move
On March 18th, according to the Taiwan Economic Daily, TSMC will increase investment in a new advanced packaging plant in the Chiayi Science Park in Taiwan. The park will allocate six new plant sites to TSMC, two more than originally expected four, with a total investment of over NT $500 billion (approximately RMB 113.7 billion). The main focus will be on expanding the advanced packaging capacity of wafer based chips (CoWoS). Relevant environmental impact assessments and water and electricity facilities have been inventoried and processed, and are expected to be announced to the public in early April this year.
CoWoS is a high-precision packaging technology that stacks chips together, which can improve processing power while saving space and reducing power consumption. At present, all the CoWoS capacity of TSMC is in Taiwan, China.
According to reports, the main orders for advanced packaging of CoWoS fall on CoWoS related equipment factories such as Wanrun, Hongsu, and Xinyun. The equipment manufacturers exclaim, "I work overtime every day, there are too many orders!"
The main reason for TSMC's large-scale expansion of production is due to the shortage of advanced packaging. Goldman Sachs believes that the most direct way to solve the shortage of AI chips in the short term is to increase CoWoS production capacity, and TSMC is at the core of it.
Goldman Sachs stated that the current shortage of AI chips is mainly due to the shortage of Nvidia H100 chips, which are manufactured using TSMC 4nm nodes and require the use of CoWoS packaging. The production capacity of advanced process technology is not the key to the chip supply problem, and the production capacity limitation of CoWoS is the main reason for the chip supply shortage.
With the booming development of AI, the global demand for advanced semiconductor packaging has surged. Morgan Stanley stated that the current supply of advanced process capacity is in short supply, and the penetration rate of advanced packaging is expected to maintain a high growth rate with the explosive demand for AI computing chips. At the same time, the penetration rate of advanced packaging for end-to-end computing chips is also rapidly increasing.
According to Morgan Stanley's calculations, the global CoWoS production capacity is expected to reach 14000 pieces per month in 2023 and 32000 pieces per month in 2024.
TSMC CEO Wei Zhejia previously revealed that the company plans to double CoWoS production this year and further increase it in 2025.
It is worth noting that this round of investment is expected to trigger a new wave of equipment procurement. Previously, TSMC resumed placing orders for CoWoS devices in April 2023, with the second and third waves of additional orders falling in June and October of last year, followed by sporadic increases. In March of this year, there has been a new wave of active pursuit, and the delivery time is expected to be in the fourth quarter of this year. The market originally expected TSMC's CoWoS monthly production capacity to reach 32000-35000 pieces by the end of 2024, but now it is expected to exceed 40000 pieces.
In its latest report, Guojin Securities pointed out that TSMC has increased production of CoWoS, and the demand for AI computing hardware continues to be strong. The continuous upgrading of large models has driven a sustained strong demand for AI hardware. Based on recent performance and guidance from relevant companies, the demand for GPUs, ASICs, AI servers, optical modules, switches, and other components has maintained a high-speed growth.
New action exposure
At present, TSMC is investing heavily in CoWoS packaging. On the one hand, it will expand production in Taiwan, China, China, and on the other hand, it plans to introduce this technology to Japan.
On March 18th, according to Reuters, informed sources revealed that TSMC is considering introducing its advanced CoWoS packaging technology to Japan. The review process is still in its early stages and a decision has not yet been made on the scale or timeline of potential investments.
If the project is successfully implemented, it will be TSMC's first output of CoWoS technology.
It is worth mentioning that TSMC recently built a chip manufacturing factory in Japan and announced that it will build another one. Both factories are located in the southern part of Kyushu Island, the center of Japanese chip manufacturing.
In addition, TSMC is establishing joint ventures with companies such as Sony and Toyota, with a total investment expected to exceed $20 billion.
A senior official from the Japanese Ministry of Economy, Trade and Industry stated that the Japanese government will welcome TSMC to introduce advanced packaging industries and actively provide support for its ecosystem.
Japan has leading semiconductor materials and equipment manufacturers, and its investment in chip manufacturing capabilities is also increasing, which are seen as favorable conditions for Japan to play a greater role in the advanced packaging field.
However, Joanne Jo, an analyst at research firm TrendForce, said that if TSMC plans to establish advanced packaging capacity in Japan, she expects the scale to be limited.
She pointed out that most of TSMC's current CoWoS customers are in the United States, and it is currently unclear how much demand there is for CoWoS packaging in Japan.
According to two other informed sources, in addition to TSMC, Intel and Samsung Electronics are also considering establishing an advanced packaging research institution in Japan to deepen their connections with local chip supply chain companies.
Sudden detonation
On March 18th local time, Bloomberg reported that according to insiders, Apple is negotiating to implant Google's Gemini artificial intelligence engine into the iPhone, laying the foundation for a major agreement that will shake the artificial intelligence industry. Gemini is a set of generative artificial intelligence models for Google.
According to reports, Apple and Google are actively negotiating to authorize Google's generative artificial intelligence model Gemini to provide support for some new features of iPhone software this year.
According to reports, Apple hopes to obtain relevant licenses to add new generative AI features to iOS 18 using the Gemini model. Apple analyst Mark Gurman predicts that the upcoming iOS 18 release in June this year will be the largest update in Apple's iOS history, and its key focus will be on "AI".
According to the latest sources, considering that there is still a gap between Apple's internal technology and competitors such as Google, seeking external partners seems to be a wiser choice. Once an agreement is reached with Google, Gemini will be able to enter Apple's over 2 billion active devices.
According to insiders, both parties have not yet decided on the specific terms or brand of the artificial intelligence agreement, nor have they finalized the implementation method of the agreement. Apple has recently had discussions with OpenAI and is considering using its large model.
Stimulated by this news, A-share AI mobile phone concept stocks surged collectively this afternoon. As of the close, Siquan New Materials rose more than 14%, Yunzhong Technology and Shengyi Electronics rose more than 12%, Xianying Technology rose more than 11%, Furong Technology, Yingtong Communication, Kechuan Technology, Chaoyang Technology and others rose by the daily limit, Industrial Fulian rose more than 8%, and Oufeiguang rose more than 7%.
AI mobile refers to a mobile terminal that deploys AI large models on the end side to achieve multimodal human-machine interaction, and is presented as a non single application intelligent mobile terminal. China International Capital Corporation (CICC) has released a research report pointing out that the current development of AI smartphones requires attention to two key points: firstly, effectively solving user pain points through AI; The second is the issue of user data security and privacy. Counterpoint predicts that the global penetration rate of AI smartphones will be about 40% in 2027, and the shipment volume is expected to reach 522 million units.
From the progress of application implementation, mobile AI applications currently mainly include independent apps, application integration into mobile phones, and integration into voice assistants. CICC believes that the business model of mobile AI applications is expected to gradually mature in the future. In the long run, mobile devices may potentially form new traffic entry points, profoundly affecting the business models of mobile phone manufacturers.