CoWoS Capacity & Direct Liquid Cooling for Advanced Packaging

Introduction: The Rising Heat Challenge in AI Accelerators

AI advancement has driven semiconductor thermal management to extremes. With AI GPU power consumption exceeding 700W—targeting 1000W+—the industry faces a critical “thermal wall” that threatens performance gains. This challenge drives innovation in CoWoS and SoIC packaging technologies, plus direct liquid cooling solutions.

Advanced packaging capacity constraints and thermal requirements are reshaping material supply chains and capacity allocation across the semiconductor ecosystem. Understanding these interconnected challenges reveals the future of high-performance computing and AI infrastructure.

Understanding Advanced Packaging Technologies: CoWoS and SoIC

What is CoWoS and Why Does It Matter for AI Chips?

CoWoS, TSMC’s 2.5D packaging solution, enables heterogeneous chiplet integration on a silicon interposer. It’s become essential for high-performance AI accelerators, including NVIDIA’s data center GPUs and AI inference chips.

CoWoS mounts multiple dies—logic chips and HBM stacks—onto a silicon interposer on an organic substrate. Key advantages:

• Ultra-high bandwidth between compute dies and memory via dense interposer redistribution layers
• Shorter signal paths reducing latency and power
• Integration of chips from different process nodes and foundries
• Larger effective die size without monolithic yield penalties

However, CoWoS introduces thermal challenges. Vertical stacking creates hotspots, while the silicon interposer adds thermal resistance. As power densities rise, these constraints intensify.

SoIC: The Next Frontier in 3D Integration

TSMC’s SoIC enables true 3D integration via TSV connections and hybrid bonding. Unlike CoWoS’s 2.5D arrangement, SoIC stacks chips vertically with bump pitches below 10 micrometers versus CoWoS’s 40-55 micrometers.

This ultra-dense integration benefits memory bandwidth applications but presents severe thermal challenges. Vertical stacking creates resistance layers impeding heat flow from lower dies, creating hard-to-address hotspots.

Thermal resistance in SoIC depends on bonded die thickness, die-to-die interface quality, and TSVs providing thermal pathways. Effective thermal management may require embedded microfluidic channels or thermal interface materials at bonding layers.

The Thermal Wall: Understanding Heat Dissipation Challenges

Thermal Resistance in Advanced Packaging

Thermal resistance (°C/W) quantifies heat conduction effectiveness from source to sink. In semiconductor packaging, junction-to-ambient resistance represents cumulative resistance through:

• Die-to-package thermal interface material (TIM1)
• Package substrate and heat spreader
• Package-to-heatsink thermal interface material (TIM2)
• Heatsink and cooling solution

CoWoS packages add the silicon interposer as another resistance layer. A 700W chip with 0.05°C/W junction-to-case resistance experiences 35°C temperature rise, leaving limited thermal budget.

AI accelerators face non-uniform power distribution. Compute regions generate higher heat flux, creating localized hotspots exceeding safe temperatures despite acceptable average chip temperature. This requires cooling addressing both high total power and power density.

Why Traditional Air Cooling Reaches Its Limits

Air-cooled heatsinks use thermal conduction then convective transfer to air. Beyond 400-500W, limitations emerge:

• Impractical heatsink size and weight for data center density
• Dramatic airflow increases raising noise and fan power
• Critical inlet air temperature limiting data center efficiency
• Thermal interface resistance becoming a bottleneck

These constraints drive adoption of liquid cooling, offering superior heat transfer via water’s higher specific heat capacity and thermal conductivity.

Direct Liquid Cooling: Breaking the Thermal Barrier

How Does Direct-to-Chip Liquid Cooling Work?

Direct liquid cooling replaces air-cooled heatsinks with liquid-cooled cold plates mounted directly to chip packages. Coolant—water, water-glycol, or dielectric fluids—flows through cold plate channels, absorbing heat from the package surface.

The key advantage: dramatically reduced thermal resistance. Eliminating heatsink-to-air convection and replacing it with liquid-to-solid conduction achieves thermal resistance 5-10 times lower than air cooling. This enables effective cooling beyond 700W while maintaining lower junction temperatures and reducing thermal throttling.

Modern implementations feature:

• Optimized cold plates with microchannels or jet impingement maximizing heat transfer
• High-performance TIMs for liquid cooling applications
• Coolant distribution units managing temperature, flow, and quality
• Leak detection and containment protecting electronics

The Evolution of Liquid Cooling Architectures

Liquid cooling evolved from rear-door heat exchangers to direct-to-chip solutions requiring server-level integration.

Recent designs embed microfluidic channels within substrates or interposers, achieving lower thermal resistance but adding complexity and reliability challenges.

For CoWoS packages, cooling must address multi-die configurations where HBM and logic dies generate non-uniform heat flux.

Industry Capacity Dynamics: CoWoS Production and Bottlenecks

The CoWoS Capacity Crunch

TSMC’s CoWoS capacity is a critical bottleneck. Monthly capacity grew from ~10,000 wafers in 2023 to targets exceeding 30,000-35,000 by late 2025.

Demand still outstrips supply. NVIDIA, AMD, and startups face 6+ month lead times. Implications:

• Premium pricing increasing costs
• Strategic allocation favoring established customers
• Incentives for alternative packaging
• Investment by competing foundries and OSATs

SoIC capacity remains tighter due to immaturity and complexity.

Material Supply Chain Implications

Advanced packaging expansion strains material supply:

Silicon Interposers: Require specialized TSV processing. Capacity concentrates among few suppliers. Larger interposers increase strain.

High-Bandwidth Memory: HBM supply struggles with AI demand. Limited suppliers create vulnerability.

Thermal Interface Materials: High-performance TIMs using phase-change materials or graphene reduce thermal resistance but cost more.

Organic Substrates: Large, high-layer-count substrates face periodic capacity constraints.

Integration of Advanced Packaging and Cooling: Design Considerations

Co-Design Optimization

Thermal challenges require co-design from early development:

Thermal-Aware Floorplanning: Distribute high-power blocks to avoid excessive heat flux.

Package Thermal Design: Minimize thermal resistance through enhanced materials and optimized heat spreaders.

Cooling Solution Integration: Develop cold plates alongside package design.

Advanced Thermal Simulation and Validation

Thermal design relies on CFD and FEA simulations capturing:

• Detailed die power maps
• Accurate material properties
• Fluid flow characteristics
• Transient thermal behavior

Validation against measured data using thermal test vehicles is critical.

Future Directions: Beyond Current Solutions

Emerging Cooling Technologies

As power increases, the industry explores advanced cooling:

Two-Phase Cooling: Leverages phase change for higher heat transfer, though complexity and reliability remain challenges.

Immersion Cooling: Provides low thermal resistance but faces serviceability and infrastructure concerns.

On-Chip Microfluidics: Minimizes thermal resistance but manufacturing complexity, leak risks, and cost limit deployment.

Advanced Packaging Evolution

Packaging continues evolving for improved electrical and thermal performance:

Fan-Out Wafer-Level Packaging: Eliminates interposer layer but faces density challenges.

Hybrid Bonding Advancements: May enable improved thermal interfaces between stacked dies.

Chiplet Ecosystem Maturation: Standardization like UCIe may enable modular thermal management strategies.

Business and Strategic Implications

How Do Capacity Constraints Shape the Competitive Landscape?

Tight capacity favors companies with secure CoWoS access through agreements or partnerships, contributing to NVIDIA’s dominance.

Startups face capacity challenges limiting production scaling, potentially driving consolidation or alternative chiplet approaches.

Investment and Capital Allocation Trends

Critical capacity needs drive multi-billion dollar investments by TSMC, Samsung, and Intel in advanced packaging.

OSATs including ASE, Amkor, and JCET invest aggressively but lag in cutting-edge technologies.

Liquid cooling suppliers experience rapid growth with surging demand from data centers and chip manufacturers.

Practical Implementation Considerations for Data Center Operators

What Do Data Centers Need to Know About Liquid Cooling?

Direct liquid cooling requires infrastructure changes:

Facility Infrastructure: Requires coolant distribution, pumps, heat exchangers, and HVAC modifications. High capital cost offset by improved PUE and density.

Operational Procedures: Introduces coolant management, leak detection, and modified maintenance. Staff training essential.

Reliability and Risk Management: Despite safeguards, leak risks require comprehensive monitoring and containment.

Total Cost of Ownership Analysis

TCO analysis must consider:

• Infrastructure capital costs
• Increased server costs
• Reduced cooling power and improved PUE
• Increased rack density
• Improved chip performance
• Operational costs

For high-density AI clusters exceeding 50-100kW per rack, liquid cooling TCO is compelling. Lower-density applications may use air cooling.

Conclusion: The Path Forward

Thermal challenges constrain performance scaling in AI accelerators. The industry response—combining CoWoS/SoIC innovation with direct liquid cooling—demonstrates ability to address physical limitations through integrated solutions.

Success requires supply chain collaboration from chip designers to data center operators. Companies navigating these interdependencies—securing capacity, optimizing thermal design, implementing cooling infrastructure—will capitalize on AI and HPC growth.

Thermal management remains critical as power increases and integration density grows. Integrating advanced packaging and cooling is both a technical achievement and strategic imperative for computing advancement.