According to Nvidia demand for Hopper and anticipation for Blackwell, which is now in full production, are at record levels and while year-on-year growth slowed, it was the lowest in seven quarters, that wasn’t being attributed to any weakening in demand.
Apparently, a mask change at TSMC constrained capacity.
Nvidia's revenue forecast disappointed Wall Street and yet again raised questions as to whether the artificial intelligence boom is beginning to wane.
Most argue that’s not the case and there are certainly plenty of companies looking to use Nvidia’s chips and sales are only being constrained by how quickly they can be manufactured by TSMC.
While Nvidia conceded that a mask change impacted supply there were also issues with the chips themselves when a flaw was found in one of its chips over the summer.
Who ever said making semiconductors was easy?
Blackwell, the company’s new flagship chip, comprises of multiple chips and building it is a complex process. Known as advanced packaging, TSMC is struggling to expand capacity at a time when Blackwell adds even more advanced packaging to the manufacturing process.
A design flaw caused the mask change and CEO Jensen Huang said the flaw, which has been fixed, lowered Blackwell chip yields, so fewer fully functional chips were produced.
The mask change appears to have set back Nvidia's production timelines and cost it money and if issues with production of these complex devices persist then there is a real risk that Nvidia could miss revenue projections.
Demand for the company's chips remains exceptional so the real issue is now whether the company can supply enough chips.
Many analysts expect Nvidia will have more demand than it can meet for all of 2025.
