On Wednesday, Nvidia CEO Jensen Huang said that a design flaw with its latest Blackwell AI chips, which impacted production, had been fixed with the help of longtime Taiwanese manufacturing partner TSMC. The chips were supposed to launch in the second quarter but were delayed, potentially affecting customers such as Meta Platforms, new tab, Alphabet’s Google, and Microsoft, which have ordered tens of billions of dollars worth of Blackwell hardware. The chip is designed to power advanced machine learning and artificial intelligence applications. It can handle larger data sets and run AI models at 25 times higher speeds than previous Nvidia hardware, according to a report by the SemiAnalysis tech analyst firm.
The chips’ problem stemmed from a flaw in the Blackwell processor die’s interconnect technology responsible for efficient communication between processing and memory systems. Resolving that issue required redesigning specific die bridge elements and extensive testing, both of which delayed the development of the hardware.
A spokesperson for Nvidia told The Information that the company is “finalizing the fixes” and is working to ensure that the Blackwell GPUs will be produced in sufficient quantities to meet demand. However, the spokesperson didn’t provide more details or address when the chips would be available.
On an earnings call this week, CFO Colette Kress also addressed the issue and confirmed that Nvidia plans to deliver Blackwell sufficiently to meet demand. She said Nvidia is working with TSMC to get the chips into production as quickly as possible.
TSMC is one of the most prolific producers of semiconductors, with a massive global presence in the industry. Its operations include various industries, from consumer electronics to data centers. Its manufacturing capabilities span multiple processes, with the flagship TSMC 12nm FinFET technology being widely used to manufacture high-performance CPUs and GPUs for the world’s top computing platforms.
The chip manufacturer is renowned for its quality control and efficiency and has long been a critical supplier to Nvidia. The two companies have a close relationship partly because both specialize in manufacturing high-performance GPUs for the most demanding computer systems.
As the market for AI-enhanced games grows, Nvidia’s chips are at the center of the action. That said, the company faces significant competition from other manufacturers of GPUs and processors. AMD, Intel, and others are working to improve their offerings to steal a more significant market share.
A delay in the availability of Nvidia’s Blackwell chip could be a severe setback for the company’s growth plans. It will be interesting to see how the company responds and whether it changes its business strategy in the future. It may choose to extend the life of its older Hopper line of AI chips as a stopgap until the release of Blackwell, or it may opt to go with a yearly cadence where it launches new GPUs on a more predictable schedule.
