The ongoing boom in artificial intelligence (AI) technologies and their associated hardware is rapidly transforming the market landscape. The reverberations of this trend are being felt across various segments, with remarkable price surges in RAM, solid-state drives (SSDs), and processors. In a recent development, TSMC has announced plans to hike its production volumes following the skyrocketing demand for Nvidia accelerators.
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High Demand for Next-Gen Nvidia GPUs
The focus is on Nvidia’s next-generation Vera Rubin GPUs, slated for production using TSMC’s advanced 3nm process. This surge in demand is notable, enough to prompt TSMC to escalate its overall 3nm production output by 50%. For context, current-generation Blackwell GPUs are manufactured using the 4nm process.
The Shift to 3nm Technology
This substantial production increase highlights a broader market shift towards smaller, more efficient chip technologies. While companies like Apple, Qualcomm, and MediaTek have already embraced the 3nm node, major players such as AMD and leading GPU manufacturers have yet to adopt it en masse. So far, only high-end mobile platforms have transitioned to this more refined manufacturing process.
Expansion of TSMC’s Manufacturing Capacity
As part of its strategic response, TSMC plans to expand the capacity of its facility in the Southern Taiwan Science Park. The planned expansion will increase production from 100,000 to 160,000 wafers per month. A significant portion of this newly enhanced capacity will reportedly be dedicated to fulfilling Nvidia’s requirements.