Nvidia’s demand for AI chips may face challenges due to production delays, analysts say. Reports indicate that Nvidia’s Blackwell chips could be delayed by three months or more because of design flaws. This delay might affect major customers such as Meta Platforms, Alphabet’s Google, and Microsoft.
Despite these concerns, analysts believe the impact on Nvidia’s revenue or demand will be minimal. Stacy Rasgon, a Bernstein analyst, noted that demand for AI chips continues to rise. Major companies are still increasing their capital expenditures on these technologies.
Even if there is a delay, sales of Nvidia’s older “Grace Hopper” chips are expected to help fill the gap. Rasgon mentioned that Nvidia’s competitive position is strong enough to withstand a three-month delay without losing significant market share.
Nvidia holds over 80% of the AI chip market, making it a key player in the AI development sector. CEO Jensen Huang had previously stated that the latest Blackwell series of AI chips was set to ship in the second quarter of the year.
However, supply constraints have been an ongoing issue. Manufacturers like Taiwan’s TSMC have struggled to keep up with the demand and expand capacity for advanced packaging techniques. Nvidia’s CFO Colette Kress had mentioned that demand for Blackwell chips could exceed supply well into next year.
Analysts at TD Cowen are confident that any issues causing delays will likely be resolved through firmware or platform updates. They believe these delays do not reflect the strong demand driving data center revenue for Nvidia in 2025.
In response to the recent media reports, an Nvidia spokesperson stated that “Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half of the year.”
In conclusion, while there may be some delays in the production of Nvidia’s Blackwell AI chips, analysts believe the company’s strong market position and existing product lineup will mitigate the impact. Demand for AI technology remains high, and Nvidia continues to play a crucial role in the industry’s growth.
