As Nvidia founder Jensen Huang observed the "iPhone moment for AI", AMD has also strengthened its role in artificial intelligence (AI). The GPU/CPU provider has reportedly set up a business unit dedicated to AI, reflecting AMD CEO Lisa Su's remark that AI will be "the most important thing of the next 10 years."
According to sources from Taiwan-based OSAT industry, the packaging and testing service demand from AMD's server chips as well as Xlinx's FPGA chips remain steady. Sources also indicated that AMD's server business unit has set the goal to achieve 20-25% annual sales growth in 2023.
The acquisition of Xlinx is believed to give AMD a competitive edge in its competition with Nvidia and Intel. Its long-term strategic partnership with TSMC has also strengthened its position: AMD's HPC product line, for example, is supported by the Taiwan-based foundry's 3DFabric platform, including CoWos-S and CoWos-R. AMD is also the first customer of TSMC's SoIC technology.
Supply chain sources, noting Nvidia's AI strategy, also observed that future HPC chip players will no longer be pure IC design houses. The trend of integrating software development into hardware design will transform these chip design houses into something more akin to "system companies".
Though TSMC's role in advanced chip fabrication is irreplaceable, a source from a major IC design house indicated that a complete supply chain integrating frontend manufacturing and backend packaging & testing processes will make "China+1" and "Taiwan+1" both important supply chain strategies. Therefore, the trend of setting up frontend and backend capabilities in the US, Singapore and Malaysia will persist.
Currently, China-based Tongfu Microelectronics is the main packaging and testing service provider to AMD's CPUs, with Taiwan-based ASE taking up the rest. Meanwhile, Southeast Asia has become a crucial site for OSAT expansion plans, with Penang, Malaysia gaining the most attentions as a site for future FC-BGA capacity expansion. Sources indicated that traditional wire-bonding remains the mainstream packaging technology in Penang, but expects Tongfu to expand its BGA capacity there.
When it comes to AMD's Taiwan-based OSAT supply chain, ASE Group's subsidiary Siliconware Precision Industries Co., Sigurd Microelectronics Corp. and its subsidiary Winstek Semiconductor Technology Co. are the main players. As AMD recognizes AI as its priority in the coming ten years, it is expected to continue driving the sales of Taiwan-based OSAT supply chain which specializes in high-end products and services.
