NVIDIA Blackwell AI Servers Exposed To “Component Shortage”, Limited Supply Expected In Q4 2024

NVIDIA's Blackwell AI servers are reportedly suffering from a "component shortage" as the Taiwanese supply chain faces tremendous market demand.

NVIDIA might be facing some issues with its upcoming Blackwell AI lineup, at least on the supply chain side of things, since the lineup is facing roadblocks. Team Green's Blackwell set of AI products is known to revolutionize the markets through the integration of new technologies and methods within the lineup. While this does have its benefits, it creates supply chain complexities, which NVIDIA is currently a victim of, which is why a report from Taiwan Economic Daily says that Team Green's Blackwell AI servers are facing massive development issues, and we'll discuss them next.

Citing a survey from Bank of America, the outlet reports that NVIDIA's Blackwell servers are a victim of a shortage of crucial industry components, which has affected the shipping timeline of Taiwanese suppliers such as Foxconn and Wistron.

Moving into the specifics, the major issue lies with the use of liquid cooling in NVIDIA's GB200 Blackwell AI servers since it is rumored that the necessary components associated with achieving the cooling mechanism have run short in the markets, which has created an order backlog.

The situation is similar to the Hopper generation, except that Blackwell is yet to be launched. The report from Bank of America says that if NVIDIA faces issues with the supply of their next-gen architecture, they might start promoting Hopper products, such as the H200 AI GPUs, which will mitigate the issue to a certain extent. All in all, while it isn't confirmed through credible sources about the delay in Blackwell, it's safe to say that the upcoming products will have a restricted supply.

With that said, NVIDIA is used to these sorts of supply chain issues during the launch of a new product and they have several backup plans ready such as Hopper chips which still make up the bulk of NVIDIA's AI revenue. It looks like Blackwell will start adding to the revenue stream in a meaningful way during 2025. NVIDIA already stated that Blackwell AI products will see a ramp in production by 2H 2024 which means that they are on track for first availability.

Given that NVIDIA's Blackwell products will be "one of the most successful" in the firm's history, and one of the costlier ones too, the firm will have gigantic financial resources on their hands to combat the supply chain disruptions, hence in the longer run, we won't see much of an issue, but at launch, Blackwell may be supplied to exclusive partners, likely being Meta and Microsoft.