12. RESPONSIBLE CONSUMPTION AND PRODUCTION

Morgan Stanley: “[TSMC’s] Customers Like AMD And Broadcom Are Releasing CoWoS-S Capacity Due To Weaker Demand,” Allowing NVIDIA To “Convert This Capacity To CoWoS-L For GB300A Production” – Wccftech

Written by Amanda

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

Over the past few days, the proverbial waters have become quite murky due to the lack of visibility over TSMC’s supposed travails related to its bespoke wafer-level system integration platform, CoWoS. Now, however, analysts at Morgan Stanley have stepped up to offer some much-needed clarity on this topic and its implications, if any, on NVIDIA’s product roll out.

As per a recent report by The Information, NVIDIA’s Blackwell AI servers purportedly continue to face overheating and glitching issues, apparently prompting the chipmaker’s mega customers, including Microsoft, Google, and Meta, to pare their respective Blackwell orders. The report went on to note that Blackwell’s woes stem from the “way [those] chips connect,” alluding to a possible flaw within TSMC’s bespoke advanced packaging solution, Chip-on-Wafer-on-Substrate (CoWoS), which enables the integration of multiple chips into a single package.

This report struck a nerve with investors, especially as NVIDIA had declared back in 2024 that it was able to rectify Blackwell’s performance-related teething issues by implementing minor changes to the photomask, a specific template that is used to create patterns on chip wafers.

However, soon after, DigiTimes calmed perturbed investors by leveraging its internal sources within TSMC to report that, contrary to The Information’s report, TSMC has “maintained” its existing Blackwell orders, negating the rumored decrease in orders from NVIDIA’s mega customers.

Now, Morgan Stanley is out with a fresh note, shedding some much-needed additional light on this topic. According to the Wall Street titan, some TSMC customers, including AMD and Broadcom, “are releasing CoWoS-S capacity due to weaker demand.”

This aligns with a separate note penned by Nomura, which notes that NVIDIA “could slash CoWoS-S orders from TSMC and UMC by up to 80% in 2025 due to weaker demand for Hopper platform chips.”

Bear in mind that NVIDIA’s Hopper chips utilize TSMC’s CoWoS-S tech while the newer Blackwell chips leverage the global chip fabrication giant’s CoWoS-L packaging tech.

Coming back, Morgan Stanley then goes on to note that, in light of CoWoS-S capacity cancelations, NVIDIA “has stepped in and requested TSMC to convert this capacity to CoWoS-L for GB300A production.”

Morgan Stanley also declares:

“Despite these shifts, TSMC’s overall CoWoS demand remains steady, with a slight potential increase in GB300A production later this year.”

This means that The Information’s report might have been partially correct: there have been order cancelations at TSMC. However, as clarified by Morgan Stanley, the cancelations only affect orders that leverage TSMC’s CoWoS-S packaging technology and that NVIDIA’s Blackwell orders likely remain unaffected.

Source: wccftech.com

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Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai