Despite a successful quarter for Nvidia, VP Huang is not entirely pleased, but kept a better tone with its manufacturing partner TSMC than in previous talks. Nvidia like other actors with 28nm circuits is suffering from a a shortage of chips and the problems are expected to keep on into next year.
TSMC underestimated the demand for its latest node, which has resulted in a capacity shortage across the entire industry. Qualcomm took the hardest blow since its success of Snapdragon S4 has been severely limited, but also Nvidia has been loud with its frustration with TSMC. Nvidia still had a good quarter according to the latest fiscal report, but is not entirely happy with TSMC – even if the tone is much more positive than before.
Demand still higher than supply
Nvidia VP Jen-Hsun Huang says it will still have limited supply in Q3, which is a combination of product distribution in the different channels, market demand and yields at TSMC. TSMC’s yields are currently at an acceptable level. He adds that yields are constantly improved and that TSMC is working hard to achieve this, which not only benefits Nvidia but also other TSMC partners.
Huang was asked what the situation will be later this year, but he only commented that the company till have to come back with a report on the matter in next fiscal report. The situation with TSMC’s latest 28 nanometer technology is still uncertain, but it requires a combination of better yields and higher capacity to saturate the market. judging from Nvidia’s statement and earlier reports we can expect shortages to continue with all 28 nm products the year out. The question is if Nvidia’s loyalty to TSMC has been damaged, since several industry sources have claimed the company is looking for seconday partners to make other products – like fast growing category of Tegra processors.
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