When the first reports about the design flaw emerged, some media outlets reported that TSMC was to blame, this might suggest that the relationship between $NVIDIA Corp(NVDA)$ and its foundry partner, $Taiwan Semiconductor Manufacturing(TSM)$ might have a strain.
Nvidia's Jensen Huang admits AI chip design flaw was '100% Nvidia's fault' , TSMC not to blame, now-fixed Blackwell chips are in production. He has also dismissed that reports of tensions between the two companies as "fake news."
From the way on how this report was handled, how Nvidia CEO responded and also work out the plan to get the design flaw fixed. This give me as Nvidia investors confidence that they have showed strength not only in their products, but also how they are able to fix any issues in a timely manner.
This gives me confidence as Nvidia investors that they have showed strength and commitment.
And the relationship they are maintaining with their key partner is also important, as Nvidia’s production partner TSMC helped fix it in a timely manner, according to Reuters.
Nvidia's yield-killing design flaw in its Blackwell GPU was fixed months ago, and a refined version of the B100/B200 processors is about to enter mass production.
Understanding The Design Flaw. Why It is Important
Nvidia's Blackwell B100 and B200 GPUs link their two chiplets using TSMC's CoWoS-L packaging technology, which relies on an RDL interposer equipped with local silicon interconnect (LSI) bridges (to enable data transfer rates of about 10 TB/s).
The placement of these bridges is critical. However, a supposed mismatch in the thermal expansion properties between the GPU chiplets, LSI bridges, RDL interposer, and motherboard substrate caused the system to warp and fail.
Understand that Nvidia reportedly had to modify the top metal layers and bumps of the GPU silicon to enhance production yields. Though no specific details was given, we do understand that it did mention that new masks were required.
Demand For Nvidia Blackwell Remains High Despite The Design Flaw Report
Nvidia has resolved the design flaw in its Blackwell line of GPUs that previously delayed production. Though the issues was entirely Nvidia's fault, affecting yield. TSMC has assist in overcoming the yield problems, which allows Nvidia to resume manufacturing.
Demand for Blackwell remains high, though Nvidia shares dipped 2.8% in yesterday’s trading.
Yield-killing problems and major functionality issues (errata) are not unheard of in the semiconductor world. Typically, companies fix them by modifying a metal layer (or two) and calling it a new stepping.
If we take $Intel(INTC)$ ‘s Sapphire Rapids as an example, it reportedly had 500 bugs, and the company released around a dozen steppings to fix them all (five were base respins). Every new stepping takes around three months to complete (including identifying the problem, fixing it, and producing a new version of the chip),.
If we were to look at the speed at which Nvidia and TSMC fixed the Blackwell GPU is pretty impressive.
Resolution of Manufacturing Issues Strengthens Nvidia’s Position
The resolution of the manufacturing issues strengthens Nvidia’s position in the competitive AI chip market. The company’s ability to quickly address technical challenges while maintaining product quality has reinforced stakeholder confidence.
The financial outlook appears equally robust, with Nvidia projecting Blackwell-related revenue in the billions for the fourth quarter. This forecast suggests strong market acceptance of the platform despite the earlier manufacturing challenges.
Remain Confident Of Nvidia Stock Price Positive Momentum
As an investors of Nvidia, I remain confident of Nvidia’s future and think that it has the positive momentum moving forward.
If we were to look at how Nvidia stock price is performing from the technical using multi timeframe, we can see that NVDA is trading well above the 50-day and 200-day period and we are also getting a strong uptrend signal from multi timeframe (MTF).
Summary
I believe Nvidia would continue to lead in the AI chip race, and with the Blackwell production well under way to their customers who has pre-order, now we will wait for the first production deployment, and then we will be able to see the difference in performance among the different competitors.
Appreciate if you could share your thoughts in the comment section whether you think Nvidia would win with the Blackwell chips going to market soon.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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