Previously, NVIDIA announced its financial results for the second fiscal quarter of FY2025 (ending July 28, 2024), showcasing impressive figures. However, NVIDIA's founder and CEO, Jensen Huang, recently acknowledged media reports regarding production issues with Blackwell architecture products. These challenges resulted in lower yields, subsequently impacting shipments.
According to TomsHardware, NVIDIA stated that changes were made to the mask of the Blackwell architecture GPUs to improve yields. Production of Blackwell architecture products is set to ramp up in the fourth quarter of this year and continue through fiscal 2026. TomsHardware reported that revenues from Blackwell products in the fourth quarter are expected to reach billions of dollars. Market demand for the current generation of Hopper architecture products remains robust and will continue to lead NVIDIA's data center product line for the rest of the year.
NVIDIA disclosed that during the second quarter of this year, issues were identified while testing Blackwell architecture GPUs with customers. The company admitted to producing a "low volume of Blackwell material" to meet the demand for Blackwell architecture chips, impacting its gross margin. However, NVIDIA has now made all necessary adjustments to the Blackwell architecture chips, ensuring no functionality loss, to move into mass production in the fourth quarter, thereby stabilizing the supply of B100 and B200.
It is understood that the B100 and B200 products built on Blackwell architecture GPUs are the first to utilize TSMC's CoWoS-L package. This package employs an RDL interlayer with an LSI bridge to connect smaller chips, enabling data transfer rates of about 10Tb/s. These components must be precisely placed during production. However, the coefficient of thermal expansion (CTE) mismatch between the GPU chip, the RDL interlayer, the LSI bridge, and the substrate can easily cause warping and system failures. As a result, NVIDIA had to redesign the top metal layer and bumps of the GPU chip to improve yields. While NVIDIA did not provide specific details of the fix, it explained that it created a new mask.
At present, it is uncertain how many Blackwell products will be shipped in the fourth quarter of this year. Given the "billions of dollars" involved, these uncertainties have indirectly contributed to the volatility of NVIDIA's stock price.
