While front-end manufacturing and back-end assembling and testing of NVIDIA's next-generation AI chips are handled by TSMC and Taiwan-based packaging and testing companies, China-based semiconductor companies are unable to seize front-end opportunities as they lag behind in manufacturing technologies. Nevertheless, China-based assembly and testing players, notably Tongfu Microelectronics, have a role to play when it come to AMD's latest AI chips.
AMD is set to unveil its next-generation AI flagship product, Instinct MI300, on June 13, aiming to challenge NVIDIA's H100. The datacenter APU, touted as the world's first integration of CPU and GPU, adopts a chiplet design. While TSMC handles the small chiplet blocks fabricated on 5nm and 6nm processes, Tongfu Microelectronics handles the advanced packaging.
As a strategic partner of AMD, Tongfu has previously stated on a investor relations platform that it is involved in the testing of AMD's Instinct MI300. As AMD fully embraces chiplet architecture design in the future, Tongfu is expected to continue reaping benefits.
There have been recent rumors indicating that TSMC's CoWoS advanced packaging capacity is constrained, and TSMC has indeed confirmed that some advanced packaging orders will be outsourced to other assembling and testing companies. Tongfu Microelectronics, with its capabilities in 2.5D, 3D, and chiplet packaging, confirmed it has no business relationship with Nvidia and is not included in the outsourcing list.。
However, despite missing out on the opportunities for Nvidia, Tongfu has already undertaken over 80% of AMD's assembly and testing business in sectors such as data centers, client devices, gaming, and embedded systems, thanks to its joint venture and cooperative strategic partnership with AMD. This is expected to bolster AMD's foray into the AI field.
The advanced packaging technology used in AMD's MI300 involves TSMC's SoIC combined with CoWoS. 3D chiplets, known as SoIC, could be a point of entry for Chinese assembly and testing companies into the AI chip market. However, it should be noted that most of the packaging processes will likely remain with TSMC.
In 2016, Tongfu Microelectronics acquired two factories in Suzhou, China, and Penang, Malaysia, from AMD, forming a joint venture. The long-term business cooperation agreement between AMD and Tongfu is already extending into 2026.
