JPMorgan Chase explains in detail the "NVIDIA chip issue": What is the problem? How long is the delay? How much impact on TSMC?

Recently, NVIDIA was exposed to delays in shipping the B200, and the market raised questions about the Blackwell supply chain delays.A recent research report from JPMorgan Chase indicates that NVIDIA faces some challenges with the B100/B200 chips and CoWoS-L packaging, as well as issues at the board-level design and system-level.Despite initial production challenges, it is expected that the GPU shipments related to Blackwell will still reach around 4.5 million units or more by 2025.What are the issues?The B100/B200 N4 chip (GB100 chip) faces some challenges, mainly due to the inclusion of two identical chips in the B200 CoWoS packaging, which have high performance (high-speed grade) and power thresholds. This may require a slight relaxation of the product's performance threshold. However, no serious issues have been found that would lead to significant redesign or delays of multiple quarters.Furthermore, due to the lower yield of RDL-based interposer/LSI manufacturing, the CoWoS-L yield remains low and unstable (JPMorgan Chase believes it is currently only at about 60%, far below the 90% or more level of CoWoS-S). The CoWoS-L process features a graphite film for substrate-level heat dissipation, but some material deformation challenges have also led to some yield losses.This may lead to:Elimination of B100, replaced by B200A: The low-end product B100 will be replaced by the slightly lower performance B200A. B200A adopts a smaller package to alleviate the CoWoS-L production pressure. The introduction of B200A will lead to an increase in demand for 5-6 thousand wafers for CoWoS-S in the next 2-3 quarters.Slower increase in GB200 production capacity in the second half of 2024: The increase in GB200 production capacity may slow down in the second half of 2024, but is expected to expand significantly in 2025. JPMorgan Chase believes that upstream shipments will begin in the fourth quarter of 2024, but total shipments may be limited due to production issues with CoWoS-L. The total shipment of GB200 in 2024 is expected to be between 400,000 to 500,000 units (compared to the previous estimate of over 600,000 units).A slight increase in H200 shipments in the second half of 2024 (up to an additional demand of 500-600 thousand units).Overall shipment of Blackwell series: The total shipment of Blackwell series GPUs is expected to exceed 4.5 million units by 2025, but initial production capacity still faces challenges.Changes in Blackwell product lineup and liquid cooling supply chainNVIDIA product line changes: NVIDIA will heavily promote the H200 server in the second half of 2024, with shipments expected to increase from Q3 2024 to Q1 2025. Looking ahead to the Blackwell generation, NVIDIA will prioritize providing GB200 servers to hyperscale users, while enterprise users may shift towards GB200A UltraProduction and Supply Chain Impact: If the capacity of GB200 cannot increase as scheduled, super large-scale users may increase their purchases of HGX B200 A and GB200A Ultra.In this scenario, Hon Hai as the main OEM factory may be affected by short-term stock price fluctuations. However, due to its diversified product line, Quanta may experience relatively minor impacts. Wistron and Inventec may benefit from the growth of the HGX series. Liquid cooling component suppliers Auras and AVC may face certain challenges if the GB200 combination declines in the future.Impact on TSMC and the Semiconductor Supply Chain:Benefiting from the increase in H200 production in the second half of the year, TSMC's revenue is expected to remain relatively stable, offsetting the launch of B100.Despite production issues, the adoption of CoWoS-L is expected to proceed as planned in 2025. Increased demand from NVIDIA for CoWoS-S may lead to supply shortages. Due to slow ramp-up of Blackwell and GB200 production capacity, Unimicron may experience delays in AI-related revenue recognition.The adoption of B200A may accelerate the use of 12Hi HBM3e in the HBM supply chain