Nvidia accelerates AI chip production with new packaging technology to meet growing demand
Nvidia Corp (NASDAQ:NVDA) will use Fan-Out Panel Level Packaging (FOPLP) technology for its GB200 AI server chips earlier than planned to address production constraints on Taiwan Semiconductor Manufacturing Co's (NYSE:TSM) Chip on Wafer on Substrate (CoWoS) packaging.
Industry insiders believe FOPLP is a viable alternative to CoWoS given TSMC's limited CoWoS capacity and growing demand for AI chips driven by generative AI applications.
According to a report by Digi Times, a senior executive at China Wafer Level CSP said that FOPLP can reduce costs and increase capacity despite having inferior technical specifications than CoWoS due to its larger process size.
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Packaging companies are preparing to offer FOPLP services, and Yole Group predicts its market share will grow from 2% in 2022 to 8% by 2028 due to improved yields and cost efficiencies.
Fan-out wafer-level packaging (FOWLP) remains the predominant fan-out packaging type.
Meanwhile, analysts hailed Nvidia's better-than-expected earnings last week as a semiconductor industry highlight. They noted that Nvidia is a top-tier high-speed computing and Gen AI supplier, backed by Blackwell's chip production plans and customers at major U.S. technology companies.
Nvidia's stock price has risen over 184% over the past 12 months, and investors can get exposure to the stock via the VanEck Semiconductor ETF (NASDAQ:SMH).
Return Stack Fixed Income and Managed Futures ETF Grizzle Growth ETF (NYSE: DARP).
Price Action: NVDA shares were up 0.89% at $1,149.10 in pre-market trading as of last check on Wednesday.
Disclaimer: This content was created in part with the help of AI tools and was reviewed and published by Benzinga editors.
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The article Nvidia Speeds AI Chip Production with New Packaging Technique to Meet Surging Demand originally appeared on Benzinga.com.
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