News briefing

 

Due to a decline in overall demand, server shipments in the first quarter of 2023 worldwide did not perform as expected; shipments dropped by 13.8% quarter-on-quarter, and volume fell to below 4 million units. However, AI applications are expected to burst onto the scene, with computing demands of data centers to continuously grow. Customers such as Microsoft, Google, and Meta started to invest in the research and development of AI servers in 2022, and mass production is expected to commence in the second half of 2023.

 

Impact analysis

 

Since OpenAI launched the AI chatbot ChatGPT in November 2022, the global AI industry entered into large-scale commercialization stage. As indicated by Jensen Huang, CEO of NVIDIA, the AI industry has entered the iPhone generation. Driven by the AI industry, demand for computing power has exploded. Taking ChatGPT as an illustration, the average number of daily visits is 25 million, and it requires 4,750 AI servers to provide computing power services. As we further witness the growth rate of computing power doubling on average each three to four months, we can see that AI servers have helped speed up the penetration rate. According to TrendForce estimates, server shipments worldwide will only grow slightly by 1.3% in 2023 due to strong inventory pressure. Nonetheless, AI servers are expanding against the trend, and it is estimated that the annual growth rate of AI server shipments in 2023 is likely to reach 15.4%, and the compound annual growth rate of AI server shipments in the next five years will reach 12.2%.

 

AI servers are currently generally configured with 2 CPUs + 8 GPUs + 1 accelerated CPU, and these high-performance computing CPU/GPU chips are mostly packaged with ABF substrates. However, the ever-increasing demand for computing power has rendered the size design of a single die to have exceeded the limit that lithography equipment can handle. As such, the heterogeneous integrated packaging technology of chiplets (smaller chips) has emerged, and key players such as Intel, AMD, and Apple are already using such technology. This has prompted the development of ABF substrates that meet the packaging trends of larger sizes, multi-layers, and thin lines. Hence, the rise of the AI industry has not only stimulated an increase in demand for high computing power, but also promoted the development of advanced packaging technology, helping to provide long-term growth momentum for ABF substrates.

Source: TrendForce