AI supply chain tracker: GPU/ server outputs seen up in Sep.

We summarize key datapoints and updates on the AI supply chain to help investors track real S/D situations. Both Taiwanese upstream and downstream supply chains are key enablers for NVIDIA, and we believe its October quarter revenue guidance on Aug 23 will be a key catalyst for global AI plays. Upstream CoWoS (Chip-on-Wafer-on-Substrate) capacity is the major bottleneck: We assume TSMC's CoWoS capacity at 11kwpm for 2023e, and more than doubling to 25kwpm in 2024e ( Exhibit 1 ). TSMC is converting some CoWoS-S capacity to CoWoS-R to increase overall supply. Wistron should see strong growth from AI from 2H23 onward: Wistron acts as the sole assembler for NVIDIA's GPU baseboard (H100) currently, and it aims to grow AI-related revenue, which includes DGX server assembly and HGX GPU baseboards, sequentially in 3Q/4Q23 to reach ~100% y/y growth this year. If FII is able to be added as the second source in 2024, we see potential 2% incremental contribution to its gross profit if we assume FII takes 50% share allocation.