The bottleneck moves to packaging
On 20 July 2023, on a quarterly earnings call, TSMC chief executive C. C. Wei said the front end of manufacturing was not a problem and what was short was the back end: CoWoS packaging, which joins the die to its memory. Capacity was to be roughly doubled over 2024.
Why it matters
The limit on scaling stops being lithographic. For half a century how much could be computed came down to how finely a transistor could be printed; here the world's largest manufacturer says it prints enough and cannot assemble the finished module fast enough. That changes what has to be watched to predict whether accelerators will be available.
Wei, answering Gokul Hariharan of JPMorgan: "For the AI, right now, we see very strong demand, yes. For the front-end part, we don't have any problem to support. But for the back end, the advanced packaging side, especially for the CoWoS, we do have some very tight capacity to -- very hard to fulfill 100% of what customers needed." He expected relief "in next year, probably towards the end of next year". Asked how much capacity was being added: "I will not give you the exact number, but let me give you a roughly probably 2x of the capacity will be added" - where the transcript carries an insertion the company made after the call, "[CoWoS capacity will be doubled in 2024 vs. 2023]". Later in the same call: "Overcapacity, not today's concern. Today concern's not enough capacity to support all the very strong demand." Two numbers this record does not carry. "Demand exceeded capability twofold" is not in the transcript; what doubles there is capacity itself, and the research report moved that figure over to the demand side. "More than 40 weeks of lead time on Hopper systems" is not in the transcript either. The sources were replaced as well. The report rested on a DIGITIMES piece of 13 July - a full week before the call - and on a brokerage note posted to Scribd. Both were dropped for the transcript TSMC publishes itself.