NVIDIA's (NVDA) latest AI chip, known as Blackwell, has been facing production delays, reportedly due to design flaws and issues with TSMC's new packaging technology for different types of chips. Internal reports suggest some NVIDIA engineers believe the design issues are causing operational failures in high-pressure data center environments. Meanwhile, TSMC employees attribute the delays to NVIDIA’s rush to complete production processes, giving them less time to resolve issues compared to other clients like Apple.
These delays have led to tensions between NVIDIA and TSMC, with both parties blaming each other for the setbacks. Despite these challenges, the two companies maintain a nearly three-decade-long partnership. NVIDIA, TSMC’s second-largest client after Apple, relies heavily on TSMC’s advanced manufacturing techniques to realize its chip designs.
The delay in Blackwell's release has been significant, with reports indicating a possible postponement of up to three months for its most advanced AI chips and potential mass production delays until the first quarter of next year. Although these setbacks are notable, they are not expected to disrupt the longstanding collaboration between NVIDIA and TSMC, which have had minor hurdles in the past.
The tension highlights the increasing pressure NVIDIA applies to TSMC as the AI business continues to grow. NVIDIA is exploring partnerships with other manufacturers like Samsung to reduce dependency on TSMC and potentially secure more cost-effective solutions for its gaming chips.
