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Report: AMD Chip Shortage Caused by Packaging Issues, PlayStation 5

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Update 1/9/2021 8:50am PT: Clarified that TSMC doesn't conduct all chip packaging in-house - some packaging is done by outside firms that are also subject to the ongoing ABF substrate shortages.

Original Article: 

It's no secret that AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them, but it looks like the same will be the case for Zen 3 notebook chips when they land in Q1. A report from DigiTimes doesn't specifically call out the reason behind the issues, but claims they could be due to either PlayStation 5 orders or a lack of packaging and substrate availability.

But the latter issue doesn't only affect AMD. Reports show that Nvidia, Apple, Huawei, EV cars, and virtually any other market that uses silicon interposers are suffering at the hands of the shortage of critical chip packaging supplies.

AMD Depends on TSMC, Who Depends on...

TSMC manufactures the silicon itself and then packages it onto a substrate so the chip can be soldered or installed onto a motherboard of some type, though it isn't entirely clear which products TSMC packages for its customers or that use OSAT (outsourced assembly and test) firms for final assembly. This is called chip 'packaging,' and reports of chip packaging problems have been circulating for a few weeks. 

Of course, it doesn't help that TSMC's capacity is already fully booked, but this news could shed new light on the reasons behind the supply issues. Previously, it was suspected that TSMC simply didn't have enough in-house lithographic capacity to make more chips, but it turns out that its reliance on external sources for either packaging supplies or final packaging services possibly contributes to the problem. TSMC's major ABF substrate suppliers, including Unimicron Technology, Kinsus Interconnect Technology, and Nan Ya PCB, are experiencing shortages. 

Digitimes' sources indicate that AMD can currently only satisfy about 50 to 60 percent of Zen 2 demand for notebooks, and that ODM's (Original Design Manufacturers) expect to run into serious shortage issues when Zen 3-based notebooks enter the market in Q3. That's narrowed down to two possibilities (or perhaps both): Either TSMC or OSAT firms can't package enough chips, or AMD's chips for the PlayStation 5 are soaking up all of its production capacity. 

So, Just Increase Supply?

The situation isn't helped by the fact that demand is currently through the roof right now. AMD's CPUs, almost all GPUs, and the latest consoles are being bought up like pastries at a bakery — except there's only one bakery for an entire city.

Naturally, in such a situation, AMD is quite powerless as a fabless chipmaker because it relies on TSMC for its parts. One could argue that TSMC's suppliers should increase supply, but that would require increased capacity and investments from the substrate makers. No one can predict with any certainty that post-pandemic demand will remain at this level, potentially making that a poor investment for those firms, so that doesn't seem likely.

This means the current difficulties with finding Ryzen 5000, Radeon RX 6000, PS5, and Xbox Series X/S consoles are likely to continue. And the same goes for Nvidia's RTX 30-series GPUs.

Niels Broekhuijsen
Niels Broekhuijsen is a Contributing Writer for Tom's Hardware US. He covers hardware news on all components and peripherals.
  • mrv_co
    The next round of "economic impact" checks here in the US isn't going to help either.
    Reply
  • gdmaclew
    Please tell me how "AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them ".
    That's not physically possible. Maybe you should have said they are flying off the shelves as fast as AMD can make them.
    Reply
  • TerryLaze
    gdmaclew said:
    Please tell me how "AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them ".
    That's not physically possible. Maybe you should have said they are flying off the shelves as fast as AMD can make them.
    Well they flew off the shelves as fast as AMD made them...that one time.
    Reply
  • unclebun
    With backordering, items can fly off the shelf faster than they are made.
    Reply
  • jkflipflop98
    gdmaclew said:
    Please tell me how "AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them ".
    That's not physically possible. Maybe you should have said they are flying off the shelves as fast as AMD can make them.


    That would depend on our definition of "fast", wouldn't it?

    If we surmise that AMD chips average less than 1KPH on the production line, but fly off the shelf at a speed of 15KPH, they would indeed be flying off the shelf faster than they were made.

    Or maybe AMD is just really bad at putting together shelving. In which case, the processors are flying off said shelves faster than AMD can put together new ones.
    Reply
  • Jesse_20
    gdmaclew said:
    Please tell me how "AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them ".
    That's not physically possible. Maybe you should have said they are flying off the shelves as fast as AMD can make them.

    Sure it is. It takes months to fully build a CPU, whereas it took moments for it to disappear from the shelf. That's technically "Faster".
    Reply
  • gdmaclew
    jkflipflop98 said:
    That would depend on our definition of "fast", wouldn't it?

    If we surmise that AMD chips average less than 1KPH on the production line, but fly off the shelf at a speed of 15KPH, they would indeed be flying off the shelf faster than they were made.

    Or maybe AMD is just really bad at putting together shelving. In which case, the processors are flying off said shelves faster than AMD can put together new ones.

    No it wouldn't. I stated "as fast as" as a comparative not a measurement of velocity.
    Reply
  • gdmaclew
    Jesse_20 said:
    Sure it is. It takes months to fully build a CPU, whereas it took moments for it to disappear from the shelf. That's technically "Faster".

    And they build them one at a time, right?
    Reply
  • HideOut
    So its the PS5's fault? I mean the Xbox twins both use this basic silicon too. And they (well at least the series X) arn't available either. But its the fault of 1 item? The series X is even more difficult to get.
    Reply
  • Chung Leong
    gdmaclew said:
    Please tell me how "AMD's Zen-3 based Ryzen 5000 series CPUs are flying off the shelves faster than AMD can make them ".
    That's not physically possible. Maybe you should have said they are flying off the shelves as fast as AMD can make them.

    From an aerodynamic standpoint, both scenarios are impossible.
    Reply