Nvidia holds 50%+ advanced packaging slots
- CNBC reported on April 8 that Nvidia has reserved the majority of Taiwan Semiconductor Manufacturing Co.’s most advanced packaging capacity for AI chips. - TSMC’s North America packaging chief told CNBC CoWoS demand is growing at about an 80% compound annual rate as Nvidia scales Blackwell systems. - TSMC is still expanding CoWoS and plans an Arizona packaging plant by 2029, showing packaging has become a supply choke point. (reuters.com)
Nvidia has reserved most of Taiwan Semiconductor Manufacturing Co.’s top-end chip-packaging capacity, shifting one of AI’s biggest bottlenecks from wafer fabs to the final assembly step. (cnbc.com) That packaging method is called Chip on Wafer on Substrate, or CoWoS. It combines a graphics processor and stacks of high-bandwidth memory in one package so the parts can move data fast enough for AI training and inference. (cnbc.com) TSMC packaging executive Paul Rousseau told CNBC that CoWoS demand is growing at roughly an 80% compound annual rate. CNBC said Nvidia has reserved the majority of the most advanced capacity available at TSMC. (cnbc.com) The squeeze matters because modern AI accelerators are no longer single chips. Reuters reported on April 22 that chips such as Nvidia’s are built from several dies joined with advanced packaging, and that this step has become a supply bottleneck for Nvidia and other customers. (reuters.com) TSMC is adding more capacity, but not fast enough to make the issue disappear this year. TrendForce reported in January that TSMC’s CoWoS capacity is projected to grow at more than 50% annually through 2026, citing TSMC Vice President Jun He. (trendforce.com) The competition is not just Nvidia versus AMD anymore. Commercial Times, translated by CommonWealth Magazine in October 2025, reported Nvidia’s 2026 CoWoS demand at 685,000 units, more than half of global demand, with Google, Amazon Web Services and Meta also pushing custom AI chips into the same supply chain. (english.cw.com.tw) TSMC is now trying to move some of that packaging footprint closer to its U.S. fabs. Reuters reported that the company plans to open an advanced packaging plant in Arizona by 2029 after previously saying it would work with Amkor on packaging technologies in the state. (reuters.com) Intel is pitching itself as the other major option. CNBC said Intel’s packaging business counts customers including Amazon, Cisco, SpaceX and Tesla, while TSMC remains the volume leader for CoWoS. (cnbc.com) The immediate result is simple: even when leading-edge wafers are available, AI chips still cannot ship until they get packaged with memory. For 2026, that makes advanced packaging capacity one of the clearest limits on how fast new AI systems can reach data centers. (cnbc.com) (reuters.com)
