Supply, not demand, is Nvidia's biggest risk
Taiwan Semiconductor (TSM) , the world's biggest chip contractor, has been struggling to meet that demand surge, forcing Nvidia to source the high-end packaging technology elsewhere, including with Amkor Technology of Tempe, Ariz., and United Microelectronics (UMC) of Taiwan.
"The demand actually is very strong," Taiwan Semi CEO C.C. Wei told investors on a conference call in late January. "Today's situation (is) that we cannot offer enough capacity to support our customers, and that condition will continue probably all the way to next year, although we are working very hard to increase the capacity."
Tristan Gerra, a senior research analyst at Baird, notes that Taiwan Semi is on track to double its CoWoS capacity this year, a move that should "help supply notably" over the second half of the year.
Gerra lifted his price target on Nvidia by $300, to a Wall Street high of $1,050 per share, in a report published Tuesday.
"Per our Asia field trip, demand for Nvidia's AI solutions remains unabated, with momentum from enterprise customers now rapidly building," Gerra wrote. "Upcoming Blackwell architecture will drive another significant step up in performance, while [average selling prices] will increase as well."
Nvidia will launch the next-generation B100 Blackwell in its AI-focused lineup later this year, adding more heft to its second-half revenue prospects and easing some CoWoS issues tied to its H100 benchmark.
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