Nvidia Faces Supply Chain Challenges as Demand for AI Chips Surges

Production delays and manufacturing bottlenecks hinder Nvidia's ability to meet unprecedented demand for its Blackwell chips, impacting revenue projections.

• Nvidia's Blackwell chips are experiencing production delays due to supply chain constraints and complex manufacturing processes, including advanced packaging by TSMC.
• A design flaw in the Blackwell chip earlier this year, now resolved, led to reduced production yields and setbacks in the production timeline.
• Despite these challenges, Nvidia reported a 94% year-over-year revenue increase in Q3, surpassing analyst expectations, with Q4 revenue projected at $37.5 billion.
• The company expects demand for its AI chips to exceed supply through 2025, with production ramping up gradually over the next several quarters.
• Nvidia anticipates gross margins to remain under pressure in the low-70% range until Blackwell production stabilizes, with improvements expected in 2025.

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