NVIDIA reportedly reducing TSMC orders for RTX 40 GPUs 5nm wafers amid lower demand 

The global economy has taken a sharp turn for the worse. The demand for many consumer electronics such as TVs and mobile phones has fallen faster than expected. Inventories in the semiconductor and electronic supply chains have risen rapidly, and price declines and order cuts have spread rapidly. The demand for terminal consumer electronics has begun to cool down in the second quarter.  

Under the impact of high inventory and low demand, NVIDIA is also affected by the sharp drop in PC market conditions. Faced with the impact of customers cutting orders to reduce inventory, NVIDIA has no choice but to tell TSMC that they have to reduce their orders. This can also be due to the large-scale release of second-hand cards to the market on top of the lower demand for gaming PCs than expected.  

According to DigiTimes, NVIDIA has paid a huge amount of prepayment to obtain the 5nm wafers. However, NVIDIA has indicated to TSMC that it intends to delay and reduce the first wave of orders. But TSMC is unwilling to make concessions. At present, the adoption of the 5nm next-generation RTX 40 series can delay the delivery of goods for one season, or even to the first quarter of 2023. 

Even another major customer of TSMC, AMD reportedly wants to lower its 7/6nm wafer orders due to the freezing market conditions. With NVIDIA already having RTX 30 cards for sale, the increasing second-hand GPU sales in addition to decreasing demand have resulted in surplus GPUs in the market. This will prove troublesome for the RTX 40 series to achieve higher sales. 

A Twitter user, RetiredEngineer has provided a highlight of the article. 

Other major companies like Apple, Samsung, and Supermicro are also reported to be cutting down their orders due to the decreasing demand. The decreasing market situation is visible in the stock prices of AMD and NVIDIA as they have fallen by almost 50% in the last 6 months.  

NVIDIA is expected to use 5nm (TSMC N4) technology for its upcoming GeForce RTX 40 series codenamed Ada Lovelace. The RTX 40 series has been interesting so far with impressive specs leaked for NVIDIA’s next-gen GPUs. The RTX 40 series is rumoured to release in September this year. 

About Nvidia

NVIDIA Corporation is an American multinational technology company incorporated in Delaware, based in Santa Clara, California. They design graphics processing units (GPUs) for the gaming and professional markets, as well as system on chip units (SoCs) for the mobile computing and automotive market.

Best known for the “GeForce” lines of GPUs, they are a direct competitor to AMD’s “Radeon” series. NVIDIA has also expanded its offerings with its handheld game consoles Shield Portable, Shield Tablet, and Shield Android TV and its cloud gaming service GeForce Now.