Dell’s wait times for PCs with GPUs, such as Nvidia’s H100, have decreased to eight to twelve weeks, significantly improving over the approximately 40 weeks they took to ship last year.
Dell According to a report from United Daily News, Taiwan’s Terence Liao stated that the company has finally been able to shorten delivery times, even if AI-fueled demand for GPUs is still high in Taiwan (and abroad). Dell projected a 39-week lead time for servers powered by Nvidia’s H100 GPUs by the end of 2023.
According to Liao, there has been a significant improvement in GPU supply since February, which has shortened shipment times. This was made possible by TSMC’s enhanced output of their chip-on-wafer-on-substrate (CoWoS) packaging service, a significant roadblock in developing datacenter GPUs such as the H100. The sophisticated packaging method was in such high demand last September that TSMC reported it could only fulfill 80% of the orders.
As stated in a previous United Daily News story from November, TSMC aimed to increase its CoWoS production capacity by twenty percent. Although TSMC predicted in September that the CoWoS shortage would endure for eighteen months, it is likely that this 20 percent increase has not fully met demand but has nevertheless lessened supply limitations. The recent earthquake in Taiwan has not impacted the supply from TSMC’s CoWoS fabs.
HPE, a competitor of Dell that reported a lead time of about 20 weeks last month, also appears to be in better shape. In contrast, market research firm Omdia reported in November that lead times for the entire server sector varied from 36 weeks to a full year. Significantly, HPE is down to 20 weeks, even if they were operating at a reasonably short lead time of 36 weeks.
Nevertheless, HPE claims that its order backlog is currently $3 billion, and the company did suffer from missing out on all those possible GPU sales. That’s not a bad problem to have.
Building more packaging plants should eventually help to address the scarcity of advanced packaging. In the second half of 2024, TSMC intends to construct a new CoWoS plant in northern Taiwan, with a completion date of Q3 of 2027.
Additionally, if TSMC can’t quickly grow its CoWoS production capability, packaging services like Intel and Samsung could increase production even more and cost the company prospective business.