According to foreign media reports, Nvidia plans to replace the intermediate substrate material of CoWoS advanced packaging with silicon carbide in the development blueprint of the new generation processor. Currently, TSMC invites major manufacturers to jointly develop the manufacturing technology of silicon carbide intermediate substrates. The main reason is that the current improvement of AI chip performance has encountered physical limitations, especially with the increase of GPU power, integrating numerous chips into silicon intermediate layers has generated extremely high heat dissipation requirements. The heat generated inside the chip is approaching its limit, and the traditional silicon material's intermediate layer cannot effectively cope with this challenge. Silicon carbide is a wide bandgap semiconductor, and its unique physical properties give it great advantages in dealing with extreme working environments with high power and high heat flux density. There are two core advantages in GPU advanced packaging. One is the heat dissipation capability. By replacing the silicon intermediate layer with a silicon carbide intermediate layer, the thermal resistance can be reduced by nearly 70%; The second is an efficient power supply architecture. Using silicon carbide can create more efficient and smaller voltage regulation modules, greatly shortening the power supply path, reducing line losses, and providing faster and more stable dynamic current response for AI computing loads.

This transformation aims to address the heat dissipation challenges brought about by the continuous increase in GPU power and provide more efficient solutions for high-performance computing chips. The thermal conductivity of silicon carbide is 2-3 times higher than that of silicon, which can effectively improve thermal management efficiency and solve the heat dissipation problem of high-power chips. Its excellent thermal performance can reduce the junction temperature of GPU chips by 20-30 ℃, significantly improving stability in high computing power scenarios. According to supply chain sources, Nvidia will implement this material change in two steps. From 2025 to 2026, the first generation Rubin GPU will still use silicon intermediate layers. TSMC has invited major manufacturers to jointly develop manufacturing technology for silicon carbide intermediate layers. By 2027, the silicon carbide intermediate layer will be officially introduced into advanced packaging processes. However, the plan faces many challenges, especially in terms of manufacturing processes. The hardness of silicon carbide is comparable to that of diamond, and the cutting technology requires extremely high standards. If the cutting technique is poor, the surface of silicon carbide will appear wavy and cannot be used for advanced packaging. Japanese equipment manufacturers such as DISCO are working hard to develop a new generation of laser cutting equipment to solve this problem. From the current perspective, silicon carbide interlayer technology will be first used in the most cutting-edge AI chips. TSMC expects to launch a 7-fold photomask CoWoS by 2027 to integrate more processors and memory, with an increase in the intermediate layer area to 14400 mm ², which will bring more substrate demand. Morgan Stanley predicts that the global CoWoS packaging monthly production capacity will soar from 38000 12 inch wafers in 2024 to 83000 wafers in 2025, and reach 112000 wafers per month in 2026. This growth will directly drive up the demand for silicon carbide interlayers. Although the current market price of 12 inch silicon carbide substrates is relatively high, with the expansion of mass production scale and the maturity of technology, it is expected that the price will gradually decrease to a reasonable level in the future, creating conditions for large-scale applications.

The silicon carbide intermediate layer not only solves the heat dissipation problem, but also significantly improves the integration density. The 12 inch silicon carbide substrate area increases by nearly 90% compared to 8 inches, and a single intermediate layer can integrate more Chiplet modules, directly supporting Nvidia's 7x mask CoWoS packaging needs. TSMC is collaborating with Japanese manufacturers such as DISCO to develop silicon carbide interlayer manufacturing technology. Once the new equipment is in place, the manufacturing of silicon carbide interlayer will be smoother, and it will enter the advanced packaging field as early as 2027.

Affected by this news, the concept of silicon carbide showed strong performance on September 5th, with the index surging 5.76%. Among the sectors, Tianyue Advanced, Luxiao Technology, and Tiantong Shares hit the daily limit up; Jingsheng Electromechanical and Yingtang Intelligent Control have surged by over 10%.
On the news front, according to the Daily Economic News, in order to improve performance, Nvidia plans to replace the intermediate substrate material of CoWoS advanced packaging with silicon carbide in the development blueprint of the new generation Rubin processor.
Public information shows that silicon carbide has excellent physical properties, and compared to silicon devices, silicon carbide devices have advantages such as high power density, low power loss, and excellent high-temperature stability. Tianfeng Securities stated that the upstream of the silicon carbide industry chain is the preparation of silicon carbide substrates and epitaxial wafers; The midstream includes the design, manufacturing, packaging, and testing of silicon carbide power devices and silicon carbide RF devices.
Downstream, the application of silicon carbide is very extensive, involving more than ten industries such as new energy vehicles, photovoltaics, industry, transportation, communication base stations, and radar. Among them, automobiles will become the core application area of silicon carbide. Aijian Securities stated that by 2028, the proportion of automobiles in the global power silicon carbide device market will reach 74%.
In terms of overall market size, according to YoleIgence statistics, the global market size for conductive/semi insulating silicon carbide substrates will be $512/242 million in 2022, and it is expected that the global silicon carbide market size will be $2.053 billion in 2026. The market size for conductive and semi insulating silicon carbide substrates will reach $1.62 billion and $433 million, respectively. The CAGR of the market size for conductive and semi insulating silicon carbide substrates from 2022 to 2026 will be 33.37% and 15.66%, respectively.