Is Nvidia Corp's Growth at Risk Due to Blackwell Chip Delays?

2 min read | January 21, 2025 06:50 AM EST | By Team Kalkine Media

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Is Nvidia Corp's Growth at Risk Due to Blackwell Chip Delays? — Image source: Shutterstock

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Highlights:

Nvidia Corp is expected to report strong results in the fourth quarter despite concerns over supply chain issues and the new Blackwell chips.

Blackwell chipset and compute board yields have likely increased, with new GPUs making up a larger share of sales.

Hyperscalers may temporarily finance purchases to ensure a steady supply and mitigate delays.

Nvidia Corp (NEO:NVDA) operates within the semiconductor sector, specializing in the design of graphics processing units (GPUs) and other advanced computing hardware. The company's products are central to various industries, including gaming, artificial intelligence, and data centers. Nvidia’s technological advancements, such as its Blackwell chips, are designed to meet growing demand for high-performance computing.

Supply Chain and Blackwell Chips

Supply chain issues have been a topic of concern for many companies, and Nvidia is no exception. However, these challenges appear less impactful than initially anticipated. The new Blackwell chipset has contributed to increased yields, particularly in compute boards, as these chips represent a larger portion of Nvidia's sales. These developments suggest that the company has managed to address some of the difficulties posed by the global supply chain constraints.

Role of Hyperscalers in Supply Stability

Hyperscalers, which include large data center operators, have likely played a role in stabilizing Nvidia's supply chain. By temporarily financing the purchase of products, these entities help ensure consistent availability and reduce the risk of delays. This support has likely mitigated some of the challenges Nvidia faced regarding the timely delivery of its chips, ensuring that the company can maintain operations without significant disruptions.

Revenue Outlook and Market Impact

Despite reports suggesting that customers have reverted to using older models to avoid potential delays in receiving the latest chips, these concerns appear to be overstated. The ongoing ramp-up in Blackwell chip production is expected to offset any reduction in sales of older models. With an expected increase in Blackwell chip volume, Nvidia is well-positioned to meet market demands and sustain a steady revenue stream in the fourth quarter.

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