TSMC declined NVIDIA's request for a dedicated packaging manufacturing line for its GPUs

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TSMC reportedly turned down a request by NVIDIA CEO Jensen Huang for the Taiwanese semiconductor giant to set up a dedicated packaging manufacturing line for NVIDIA's products.

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In the world of chips, semiconductor fabrication and chip packaging have become increasingly important to pump out the amount of AI GPUs and advanced packaging as possible. Unlike fabrication capacity, packaging has struggled to keep up with the insatiable demand for chips, with TSMC having to dedicate considerable resources towards advanced packaging capacity.

NVIDIA CEO Jensen Huang visited TSMC headquarters earlier this year, meeting with TSMC founder Dr. Morris Chang and the firm's former chairman. Industry sources said Jensen requested the company set up a dedicated packaging line for NVIDIA GPUs.

The discussion between Jensen and TSMC executives was "quite tense" according to sources, with TSMC executives asking many questions in regards to Jensen's requests. The sources said that the discussions were unfruitful, and that the atmosphere inside of the meeting room being "tense".

• Read more: TSMC seeks land for new CoWoS advanced packaging plant, struggles to keep up with AI demand
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• Read more: TSMC is already buying equipment for two CoWoS advanced packaging plants to be built in Taiwan

The advanced packaging capacity issues have plagued the AI market since its hype started in 2023, with TSMC not able to handle the demand for its advanced packaging, with reports that its advanced packaging capacity had been secured all the way through 2025. NVIDIA and AMD have reserved TSMC's CoWoS and SoIC advanced packaging for both 2024 and 2025, with TSMC scrambling to increase capacity.

• Read more: NVIDIA raises orders 25% for TSMC for its next-gen Blackwell AI GPUs amid strong AI demand
• Read more: NVIDIA places fresh new orders with TSMC for more Blackwell GB200, B100, B200 AI chips