2025-04-14 01:32Summary of Key Points from the Conference Call Industry Overview - The focus is on the AI supply chain, particularly the CoWoS (Chip on Wafer on Substrate) capacity and its implications for the global AI market, with TSMC's decisions being pivotal for 2026 capacity allocation [1][2][3]. Core Insights - TSMC's Capacity Expansion: TSMC is expected to adopt a conservative approach for its 2026 CoWoS capacity expansion, with an early decision anticipated in mid-May based on customer demand feedback. Current expectations suggest an increase from approximately 70-75k to 105-125k in 2026 [2][3]. - Forecasted Growth: The forecast for CoWoS capacity is set at 70kwpm for 2025 (doubling from 2024) and 90kwpm for 2026, indicating a year-over-year growth of 119% in 2025 and 29% in 2026 [3]. - China's GPU Supply Chain: There is a noted decoupling of China's GPU and CoWoS supply chain from global suppliers, with local production expected to ramp up if SMIC can enhance its capacity [4][5]. - AI Capex in China: Chinese cloud service providers (CSPs) are projected to spend up to RMB 300 billion on AI capital expenditures from 2026 to 2028, with significant allocations for GPUs [5][47]. Additional Important Points - Tariff Impacts: The ongoing tariff policies are expected to influence AI capital expenditures and procurement costs, creating uncertainty in the market [2][11][15]. - Demand for Local GPUs: There is a strong demand for local GPUs in China, although dependency on domestic production remains low outside of government use [44][45]. - Spot Price Trends: The demand for Nvidia's gaming graphics cards has surged, leading to increased spot prices, while rental prices for AI GPUs are trending downward ahead of new product launches [10][11]. - Customer Allocation: Nvidia is expected to see a 35% year-over-year growth in CoWoS consumption in 2026, driven by larger chip sizes, while AWS and Google are also anticipated to gain market share in AI ASICs [13][16]. Data Highlights - CoWoS Demand Breakdown: The total demand for CoWoS wafers is projected to grow significantly, with Nvidia, Broadcom, and AMD being the key customers [18][27]. - Revenue Projections: AI computing wafer consumption is expected to generate up to $16.1 billion in revenue by 2025, with Nvidia being the largest customer [41][43]. - HBM Demand: The demand for High Bandwidth Memory (HBM) is projected to reach nearly double the 2024 levels, with Nvidia again being the largest consumer [34][39]. Conclusion - The AI supply chain is poised for significant growth, driven by advancements in CoWoS technology and increasing demand for AI capabilities. However, external factors such as tariffs and geopolitical dynamics will play a crucial role in shaping the landscape.