Impact of the Nvidia GB200 delay incident

NVIDIA (NVDA) has postponed the production of its GB200, which has raised some concerns in the market. After conducting some research, here’s my take on the situation and what investors should consider regarding this development.

First and foremost, the issue appears to stem from back-end design rather than the chips themselves, which would have been more serious and time-consuming to resolve (six months plus delay). We now anticipate a delay of approximately one quarter, and both NVIDIA and TSMC will need to make adjustments to the design and production processes, respectively. The GB200 was initially expected to be delivered in Q4 of this year, but the new timeline now targets late 25Q1, potentially extending into Q2. Additionally, the Blackwell Ultra is now planned for the 25H2.

Despite the challenges, demand for Hopper remains strong, and the delay in the B series will result in a higher production of Hopper this year - estimate an additional 500,000 more Hopper units for this year compared to the original forecast. From a margin perspective, Hopper has slightly better margins, so its increased mix should have a positive impact on profitability in 2024.