According to reports, Nvidia is making rush orders with TSMC for its H100 and A100, as well as the H800 and A800 tailored exclusively for China. TSMC’s SHR for Nvidia’s AI GPUs will be available throughout the year.
The orders have already increased TSMC’s 7/6nm process family utilisation rates, which had previously been falling fast due to diminishing demand, while the foundry house’s utilisation rates for the 5/4 processes are also climbing quickly, reaching nearly full capacity.
Nvidia CEO Jensen Huang remarked, while announcing the company’s results for the first quarter of fiscal 2024 (ending April 30, 2023), that the computer industry is undergoing two transformations at the same time, namely accelerated computing and generative AI.
Nvidia is riding the AI wave that was sparked by the introduction of ChatGPT. The company commands a commanding position in the AI GPU industry. Following the US chip restrictions against China, Nvidia rapidly created scaled-down versions of its H100 and A100 processors for the country, the H800 and A800, to avoid the ban.
According to reports, demand for the reduced versions has been significant from large Chinese corporations such as Baidu.
Nvidia posted strong financial results for the first quarter of fiscal 2024, with revenue increasing 19% sequentially to $7.19 billion. It has also issued a bullish forecast for the second quarter.
Even Intel CEO Pat Gelsinger admits that Nvidia is well-positioned to capitalise on AI potential.
Nvidia’s good performance benefits TSMC, its chipmaking partner. TSMC had expected big orders from Apple to support the vendor’s introduction of new products, but not the surge of the companys urgent orders.
TSMC stated during its April 2023 investor conference that its first-quarter 2023 business was hit by weaker macroeconomic conditions and declining end market demand, which caused customers to alter their demand accordingly. It stated that the company expects clients’ inventory adjustments to continue to have an impact on business in the second quarter.
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