AI Supply Chain_ Preparing for Rubin

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the AI semiconductor supply chain, focusing on the upcoming Rubin chip and its implications for companies like NVIDIA, TSMC, KYEC, ASE, and ASMPT [1][2][12]. Core Insights and Arguments 1. Rubin Chip Development: - The Rubin chip is expected to tape out earlier in 2H25, compared to the original schedule of 1H26, due to its complex design [2][12]. - The 3nm Rubin GPU is projected to enter the market in 2026, with a chip size nearly 2x that of the Blackwell chip, potentially including four compute dies [1][12]. 2. Market Share and Revenue Projections: - NVIDIA's AI GPUs are anticipated to contribute 26% to total revenue in 2025, with a 100% market share in the AI GPU segment [1][12]. - KYEC is expected to see AI-related revenue grow from 11% of total revenue in 2024 to 26% in 2025, driven by the final testing of the Blackwell chip [7][12]. 3. TSMC's Capacity and Orders: - TSMC has not provided a concrete forecast for CoWoS capacity beyond 90kwpm in 1Q26. New orders for 2026 are expected to be placed in mid-2025, contingent on AI capital expenditure sustainability [2][12]. - TSMC's initial order for CoW fluxless TCB with K&S is small, with fewer than 10 tools expected in 2025, but larger orders are anticipated in 2026 [1][12]. 4. Testing and Production Trends: - The lead time for the new Advantest tester has increased from 3 to 6 months due to high demand, indicating a structural trend towards longer testing times for AI chips [6][12]. - The final test time for Blackwell is approximately 18 minutes, significantly longer than previous models, which may impact production timelines [7][12]. 5. Capex and Financial Health: - The top four US hyperscalers are projected to generate US$168 billion in operating cash flow in 2025, indicating strong financial health to support ongoing investments in AI and data centers [40][47]. - The average AI capex/EBITDA ratio is expected to remain around 40% in 2024, suggesting that these companies have sufficient financial resources for further spending [47][50]. Additional Important Insights - ASE is expected to benefit from opportunities in chip probing and advanced packaging, with management projecting revenue to exceed US$1 billion in 2025 [13][12]. - ASMPT is lagging in CoW fluxless TCB qualification, which may affect its competitive position in the advanced packaging space [13][12]. - The demand for HBM (High Bandwidth Memory) is projected to nearly double in 2025, with NVIDIA being the largest customer, accounting for 65% of the demand [30][35]. This summary encapsulates the critical points discussed in the conference call, highlighting the advancements in AI semiconductor technology, market dynamics, and financial outlook for key players in the industry.