Packaging constraints with the H20 chip
While Reuters’ report highlighted the apparent challenges with the technical integration of the chip, Ian Cutress, chief analyst of More Than Moore, also noted that packaging constraints exist for the H20 because it uses the in-demand Chip on Wafer on Substrate (CoWoS) technology, with expected capacity expansion by TSMC not until 2024.
“With any hardware meeting the new standards, Nvidia has the capacity to ship anywhere from 10 to 10 million units, depending on manufacturing capabilities,” Cutress said. “Although packaging capacity is a limiting factor, it’s primarily an issue for the H20 model, which uses CoWoS and is currently in high demand.”
But as per Canalys’ Yeh, there are limits to this demand.
“While the AI server market has experienced extraordinary growth, we expect this upward trend to persist, though at a more tempered pace relative to the heights of 2023. The sector maintains strong momentum, yet it’s prudent to moderate expectations moving forward,” Yeh said.
This moderating tempo would ease up demand for CoWoS, perhaps creating a glut, which according to Yeh, may eventually become oversupplied as there are multiple players who are aggressively expanding capacity.
Even retail GPUs impacted by rules
Under the rules set out by the US Department of Commerce and Bureau of Industry Security, which measures the Total Processing Power and performance density data, Nvidia’s latest data center-grade GPUs and many of its high-end retail cards are prohibited from export.
